Net financing to the private sector through the banking system and the capital market expanded at a higher annual rate of 11.3%. All major loan indicators across both business and household sectors increased during the month.
Following the increase in the OPR to 2.75% on 8 July, the daily weighted average overnight interbank rate trended higher and interbank rates of other maturities also rose accordingly. In terms of the commercial banks' lending rates, both the average base lending rate and the average lending rate were higher as at end-June. The average fixed deposit rates have also increased.
From 1 June to 29 July 2010, the ringgit appreciated by 1.7% against the U.S. dollar as further signs of regional economic recovery contributed to favourable investor sentiments towards the regional financial markets.
Against other major currencies, the ringgit depreciated against the pound sterling (-5.8%), euro (-3.7%) and the Japanese yen (-2.9%). Against regional currencies, the ringgit appreciated against the Chinese renminbi (1%), Thai baht (1%), Philippine peso (0.7%) and Korean won (0.6%) but depreciated against the Singapore dollar (-0.8%) and Indonesian rupiah (-0.4%).
Headline inflation was higher at 1.7% in June. The increase in headline inflation was largely the result of price increases in the food and non-alcoholic beverages category.
Broad money (M3) rose at a faster annual rate of 8.8%. M3 also increased on a month-on-month basis, reflecting mainly higher credit extension by the banking system to the private sector.
The banking system's capitalisation remained strong with the risk-weighted capital ratio and core capital ratio at 14.8% and 12.9% respectively.
Other Highlights:
- Commercial banks' lending rates have increased following the 25 basis point increase in the OPR.
- The Consumer Price Index (CPI) edged higher to 1.7%.
- The banking system's capitalisation remained strong with the risk-weighted capital ratio (RWCR) and core capital ratio (CCR) at 14.8% and 12.9% respectively.
30 July 2010
