Banking, capital market further strengthened
The banking system and capital market were further strengthened between January and August this year to facilitate and catalyse economic growth as Malaysia is transitioning to a high-income and
The Finance Ministry said financial intermediation continued to support economic activities with total loans outstanding in the banking sector increasing 9.3 per cent to RM1.18 trillion as at August.
"Total financing outstanding of development financial institutions increased 8.5 per cent to RM117 billion, particularly to strategic economic sectors," the ministry said in its 2013/2014 Economic Report released today.
The report is released in conjunction with the tabling of the Budget 2014 in Parliament today by Prime Minister Datuk Seri Najib Razak, who is also the Finance Minister.
The report said the capital market remained an important source of financing for companies with total private bonds outstanding totalling RM415.3 billion and market capitalisation of the equity market increasing to RM1.59 trillion as of August.
On monetary development, the Finance Ministry said the monetary policy between January and August was focused on supporting growth, with overnight policy rate (OPR) kept at three per cent and statutory reserve requirement (SRR) maintained at four per cent, while inflation remained contained.
The ministry said the policy stance, which continued to promote price stability in an environment of sustained economic growth, was deemed appropriate and would be assessed against the global economic and financial developments, with its implication to the domestic economy.
On prospects, the ministry said the Financial Sector Blueprint (2011-2020) and the Capital Market Masterplan 2 (2011-2020) are expected to continue to drive the growth of the domestic financial sector in 2014.
The Finance Ministry said as the country is transitioning towards a high value-added and high-income economy, the financial sector will play a key role in spurring new growth areas and facilitating economic transformation.
"In this regard, a critical success factor is to ensure the supply of a deep pool of highly-skilled talents," it added.-- Bernama