Bank Negara Malaysia’s July monthly highlights show headline and core inflation easing to 1.8% from 1.9% in June, reflecting lower external cost pressures, slower retail fuel inflation and softer price increases for several core items. The trade surplus widened to MYR 22.5 billion from MYR 15.8 billion as strong exports more than offset higher imports. Export growth moderated to 38% but remained supported by electrical and electronics shipments, particularly semiconductors. Credit to the private non-financial sector grew 6.5%, with outstanding loans rising 6.1% and corporate bonds increasing 8%. Business loan growth accelerated to 7.5%, mainly due to working capital lending, while household loan growth held at 5.3%. Banking system liquidity and asset quality remained stable, with the aggregate Liquidity Coverage Ratio at 148.7%, gross impaired loans at 1.4% and net impaired loans at 1%. The ringgit weakened 0.5% against the U.S. dollar amid changing expectations for U.S. monetary policy and geopolitical uncertainty. Ten-year Malaysian Government Securities yields rose 10 basis points, while the FTSE Bursa Malaysia KLCI gained 3.7%, supported by non-resident inflows.
2026-08-28Bank Negara Malaysia
Bank Negara Malaysia reports lower July inflation, wider trade surplus and sustained credit growth
Bank Negara Malaysia reported that headline and core inflation eased to 1.8% in July, while the trade surplus widened to MYR 22.5 billion on continued export strength. Private non-financial sector credit grew 6.5%, and banks maintained adequate liquidity buffers and stable asset quality. The ringgit edged lower against the U.S. dollar, while Malaysian equities gained 3.7%.