Money Supply Eases in September, But Deceleration in Loans and Deposits Growth Halted

Economic Research	1 November 2016
Malaysia
Economic Highlights
Money Supply Eases in September, But Deceleration in Loans and Deposits Growth Halted Growth of the broader money supply, M3, slowed to 2.2% y-o-y in September, from +2.4% in August, due to a decline in external operations and a slowdown in demand for funds by the private and public sector. Including the Islamic Investment Accounts, M3, eased to 4.0% y-o-y during the month, from +4.3% in August. This is still in line with our M3 estimate of 4.0%-5.0% as at end-2016 and around 4.0% in 2017. Meanwhile, loan growth was stable at 4.2% y-o-y in September, unchanged from the previous month but lower compared with +5.6 in July, as the deceleration in growth of household loans were mitigated by the marginal increase in business loans. As a result, we project loan growth to slow down to around to 3.7% in 2017, from an estimated 4.3% in 2016 and compared with 7.9% in 2015. Economist:  Vincent Loo Yeong Hong  | +603 9280 2172 Economist: Aris Nazman Maslan | +603 9280 2184
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