Loan growth expanded to four-month high in May; broad money (M3) moderated
Broad money (M3) growth moderated to 2.7% YoY (Apr: 3.2%), reversing previous month’s rebound
- Reason: The moderation was primarily due to slower growth in fixed deposits (1.8%; Apr: 2.6%) and saving deposits (1.2%; Apr: 3.0%), reducing their contribution to M3 growth to 0.9 ppts (Apr: 1.4 ppts).
- MoM (-0.3%; Apr: 0.5%): contracted to a three-month low, declining by RM7.2b (Apr: RM12.6b).
Weak government activity continued to drag M3 growth, but strong net claims on private sector partially offset the slowdown
- Net claims on government (-3.7%; Apr: -1.2%): fell sharply for the fourth straight month, as government claims (-2.4 %; Apr: 0.2%) contracted, while government deposits continued to slow (3.6 %; Apr: 6.8%).
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