Bank Negara Malaysia: Strengthening Resilience and Stability Amid Volatility

Bank Negara Malaysia (BNM) reported that Malaysia’s financial markets remained orderly and resilient during global volatility in the second and third quarters of 2024, as detailed in its Financial Stability Review. Market fluctuations were influenced by shifting investor expectations regarding major central banks’ monetary policies. As of September 30, the ringgit appreciated by 11.4% against the US dollar, bolstered by positive economic prospects and structural reforms.

Bank Negara Ensures Confidence in Markets

Business activities improved overall, although some sectors faced cost pressures and slower demand for non-essential products. BNM noted strong business resilience, with a stable impairment ratio of 2.6% for business loans and a decline in delinquent loans among SMEs. The share of SMEs requiring repayment assistance decreased to 4.7% of total SME loans, indicating that most SMEs that exited assistance programs were able to sustain their repayments.

Looking ahead, BNM expects further improvements in business resilience, supported by economic growth and easing input costs. Household debt-to-GDP remains stable at 83.8%, with higher-risk borrowings dropping to 4.4% of total loans. BNM emphasized the importance of strong risk management and cybersecurity measures in financial institutions.

Deputy Governor Jessica Chew stated, “BNM continues to raise standards expected of financial institutions in response to new and emerging threats.” Additionally, the banking system’s total capital ratio stood at 18.4%, and cross-border QR payment transactions doubled in the first half of 2024 compared to all of 2023.

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