October M3 growth hit 14-month highs; loan and deposit growth slows
Broad money (M3) growth expanded to 4.5% YoY in October (Sep: 4.4%), the fastest pace in 14 months
- Key drivers: Stronger fixed deposits (2.5%; Sep: 1.4%) and a smaller contraction in other deposits (-0.5%; Sep: -6.0%), lifting their combined contribution to 1.1 ppts (Sep: 0.1 ppt).
- MoM (1.0%; Sep: 0.4%): Rose to a 10-month high, adding RM24.1b to the system, the largest increase since Dec 2023 (RM33.4b).
Strong private sector activity, higher net foreign assets, and a rebound in government spending supported M3 expansion
- Net claims on government (0.8%; Sep: -0.5%): Rebounded after two months of contraction as high base dissipated. Both government deposits (1.8%; Sep: 16.5%) and government claims (1.0%; Sep: 2.6%) slowed sharply.
- Claims on private sector (6.0%; Sep: 5.8%): Rose to the highest since March 2019 (7.9%) driven by stronger growth in securities holdings (10.8%; Sep: 9.8%) and loans (5.4%; Sep: 5.3%).
- Net foreign assets (7.3%; Sep: 5.3%): Jumped to a 14-month high, supported by higher BNM’s net foreign assets (8.4%; Sep: 6.2%) and higher foreign assets in the banking system (3.8%; Sep: 2.4%).
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