Loan growth accelerates in October, while M3 growth remained steady
Broad money (M3) supply growth unchanged in October (4.2% YoY; Sep: 4.2%)
- Reason: the expansion in fixed deposits (5.3%; Sep: 4.5%), which hit an eight-month high was partially weighed by slower demand deposits (4.7%; Sep: 6.4%). Notably, fixed deposits contributed 2.3 ppts (Sep: 2.0 ppts) to overall M3 growth
- MoM: surged (0.9%; Sep: 0.1%) to a 10-month high, adding RM21.1b, the highest since December 2023.
Lower government spending was partially mitigated by strong private-sector spending
- Net claims on government (7.7%; Sep: 9.9%): slowed sharply to a 17-month low due reduced claims (3.5%; Sep: 4.4%), which fell to the lowest since January 2020, and further weighed by persistent declines in government deposits (-12.4%; Sep: -14.5%).
- Claims on private sector (5.0%; Sep: 4.7%): reached a three-month high due to increased loans (6.0%; Sep: 5.7%), despite weakness in securities (-1.8%; Sep: -2.0%).
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