KUALA LUMPUR (Sept 30): Bank Negara Malaysia (BNM) said on Friday (Sept 30) that the moderation in global economic growth and lower commodity prices are expected to weigh on Malaysia’s export growth.

“Malaysia’s diversified exports across products and markets should help cushion this impact,” BNM said in its August monthly highlights report.

The central bank, citing data from the Department of Statistics and the Malaysia External Trade Development Corporation (Matrade), reiterated that the country’s exports had registered a robust growth of 48.2% year-on-year (y-o-y) in August 2022, to a value of RM141.3 billion.

In comparison, exports grew 38% in y-o-y in July 2022 (RM134.1 billion) and 38.7% in June 2022 (RM146 billion). 

“Manufactured export growth was driven by the electrical and electronics (E&E) and petroleum products. Meanwhile, exports of commodities continued to be supported mainly by crude palm oil (CPO), liquefied natural gas (LNG) and crude petroleum shipments,” BNM said. 

In addition, it said that net financing grew by 6.1% as at end-August (July: 5.3%), driven by higher growth in both outstanding loans by 6.8% (July: 5.9%), and corporate bonds by 4.3% (July: 3.7%). 

“Outstanding household loans grew by 6.5% (July: 6.1%) amid steady growth across most purposes. Notably, loan disbursements reflected sustained growth in loan applications, particularly for the purchase of houses and cars,” BNM said.

“For businesses, growth in outstanding loans rose to 6.7% (July: 5.9%), mainly driven by the wholesale trade, manufacturing and utilities sectors. By segment, credit flows to SMEs (small and medium enterprises) remained particularly forthcoming, with outstanding loan growth higher at 7.5% (July: 6.6%).”

It also assured that banks remained well-capitalised to support economic recovery. BNM said the banking system recorded a RM126.7 billion of excess capital buffers as at end-August. 

“Banks’ capital position remained strong to withstand potential stress and continue supporting credit flows to the economy. This enabled some banks to sustain dividend payouts during the month,” BNM said.

Banks’ resilience continued to be underpinned by sound asset quality, BNM added.

“Overall gross and net impaired loans ratios remained broadly stable at 1.84% (July: 1.85%) and 1.1% (July: 1.2%), respectively. Loan loss coverage ratio (including regulatory reserves) remained at a prudent level of 113.7% of impaired loans, with total provisions accounting for 1.8% of total loans,” it said.

BNM said the banking system recorded RM41.5 billion of total provisions and regulatory reserves as at end-August.