KUALA LUMPUR (Dec 30): Malaysia’s broad money (M3) expanded at a higher annual rate of 12.4% in November, underpinned by higher credit extended to the private sector by the banking system.

Bank Negara Malaysia (BNM) said on Friday net financing to the private sector expanded by RM16.8 billion in November, attributed to an increase in outstanding banking system loans and higher net issuances of private debt securities (PDS).

“There was a continued expansion in banking system loans to businesses, mainly to the education, health and others; construction and real estate sectors,” it said in a statement.

BNM said household loans outstanding expanded steadily, driven mainly by loans for the purchase of residential properties. Loan demand increased with higher loan applications, particularly from the business sector.

It said the banking system continued to be well-capitalised with the risk-weighted capital ratio (RWCR) and core capital ratio (CCR) sustained at strong levels of 14.8% and 12.7% respectively.

The level of net impaired loans remained stable at 2% of net loans, while the loan loss coverage ratio remained high at 96.3%.

BNM’s international reserves were at RM429.8 billion (US$135 billion) as at Dec 15, sufficient to finance 9.8 months of retained imports and was 4.1 times the short-term external debt.