Malaysia's Inflation Moderates Amid Ringgit Appreciation

Malaysia's headline inflation eased to 1.4% in March 2025, according to Bank Negara Malaysia (BNM). This is a decrease from 1.5% in February, while core inflation remained steady at 1.9%. The central bank cited waning effects of past policy adjustments on non-core CPI components as a factor. The ringgit appreciated by 0.7% against the US dollar amid concerns over the US economy. The nominal effective exchange rate rose 0.2%, slightly below the regional average. Business loan growth increased to 4.8%, driven by higher working capital financing. Despite global financial market volatility, Malaysia's banking system remains sound. The aggregate liquidity coverage ratio stood at 151.6% in March. The gross impaired loans ratio edged down to 1.4%.