KUALA LUMPUR – Malaysia’s headline inflation eased further to 1.1% in June 2025 from 1.2% in May, while core inflation remained unchanged at 1.8%, said Bank Negara Malaysia (BNM).
In a statement today, it said the decline in headline inflation was largely driven by lower inflation in non-core components, particularly fresh food, diesel and air passenger transport.
“Higher inflation in selected core items – such as food away from home and streaming services – was largely offset by lower inflation for mobile communication services and video game consoles,” it said.
Meanwhile, credit to the private non-financial sector grew by 5.2% in June 2025 (May 2025: 5.4%), following steady growth in outstanding loans of 5.5%, while growth in outstanding corporate bonds moderated to 4.3% in June 2025 (May 2025: 4.7%).
“Outstanding business loan growth was broadly steady at 4.5% amid sustained growth in loans for investment-related purposes, particularly among the small and medium enterprises (SMEs).
“Household loan growth remained steady at 6% in June 2025 amid sustained growth in loans across most purposes,” it added.
BNM said against global uncertainties, the ringgit appreciated by 0.5% against the US dollar, with the nominal effective exchange rate (NEER) at -0.2% (regional average: 0.3%), supported by continued broad-based US dollar weakness.
Additionally, the central bank and the government will continue to coordinate efforts to encourage foreign exchange flows, it said.
“The FBM KLCI rose by 1.6% (regional average: 1.5%), in line with movements of regional equity markets, while the 10-year Malaysian Government Securities yield decreased by 5.0 basis points (bps) (regional average: -11.5 bps),” it said.
According to BNM, the banking system continued to record healthy liquidity buffers with an aggregate Liquidity Coverage Ratio of 160.6% in June 2025, while the aggregate loan-to-fund ratio remained broadly stable at 83.3%.
BNM said the gross impaired loans ratio declined slightly to 1.4% during the month, but net impaired loans ratio remained stable at 0.9%.
It added that the loan loss coverage ratio (including regulatory reserves) remained prudent at 130.3% of gross impaired loans. – July 31, 2025