Kuala lumpur: Malaysia’s headline inflation eased further to 1.1 per cent in June 2025 from 1.2 per cent in May, while core inflation remained unchanged at 1.8 per cent, said Bank Negara Malaysia (BNM).

According to BERNAMA News Agency, 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.

Meanwhile, credit to the private non-financial sector grew by 5.2 per cent in June 2025, following steady growth in outstanding loans of 5.5 per cent, while growth in outstanding corporate bonds moderated to 4.3 per cent. Outstanding business loan growth was broadly steady at 4.5 per cent amid sustained growth in loans for investment-related purposes, particularly among the small and medium enterprises (SMEs). Household loan growth remained steady at six per cent in June 2025 amid sustained growth in loans across most purposes.

BNM stated that against global uncertainties, the ringgit appreciated by 0.5 per cent against the US dollar, with the nominal effective exchange rate (NEER) at -0.2 per cent, 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.

The FBM KLCI rose by 1.6 per cent, in line with movements of regional equity markets, while the 10-year Malaysian Government Securities yield decreased by 5.0 basis points. According to BNM, the banking system continued to record healthy liquidity buffers with an aggregate Liquidity Coverage Ratio of 160.6 per cent in June 2025, while the aggregate loan-to-fund ratio remained broadly stable at 83.3 per cent.

BNM reported that the gross impaired loans ratio declined slightly to 1.4 per cent during the month, but the net impaired loans ratio remained stable at 0.9 per cent. The loan loss coverage ratio, including regulatory reserves, remained prudent at 130.3 per cent of gross impaired loans.