Ringgit strengthens in 4Q22 on encouraging global developments, domestic political certainty

KUALA LUMPUR - The ringgit ended the fourth quarter of 2022 (4Q 2022) stronger by 5.3 per cent against the US dollar, buoyed by the encouraging global developments and greater domestic political certainty with the formation of the new government in November, says Bank Negara Malaysia (BNM).

In a statement today, BNM said the local note's performance was also in line with other regional currencies, as market expectations for smaller interest rate increases by the United States (US) Federal Reserve amid indications of slowing inflation in the US eased interest in the greenback.

"Global investor sentiments on the ringgit and regional currencies have also been somewhat lifted by the reopening of China’s economy and its expected positive economic spillovers to the region," it said.

The central bank said the ringgit also strengthened against several major trading partners, with the nominal effective exchange rate (NEER) appreciating by 0.4 per cent during the quarter.

"Moving forward, BNM will continue to closely monitor global and domestic financial conditions, and ensure orderly financial market adjustments," it said.

On financing conditions, BNM said credit to the private non-financial sector stood at 4.7 per cent in 4Q 2022 against 5.3 per cent in 3Q 2022, amidst the lower outstanding loan growth of 4.7 per cent during the quarter under review versus 5.7 per cent in 3Q 2022.

Meanwhile, it said outstanding corporate bonds continued to grow by 4.6 per cent in 4Q 2022 from four per cent in 3Q 2022, while outstanding business loans grew by 3.3 per cent in 4Q 2022 as the sustained strong growth in loan repayments outpaced that of loan disbursements.

It noted that growth in loan disbursements was sustained at 12.0 per cent in 4Q 2022, particularly for working capital loans as firms continued to draw down on their existing credit facilities.

"For households, outstanding loan growth expanded by 5.5 per cent amid the slower growth in loan disbursements and sustained growth in loan repayments," it said. - BERNAMA