Bank Loan Growth Down

 Here is some information on Investment and the Economy:

Overall bank loan growth fell to 3. 4% year-on-year on June-21, the slowest growth recorded since December-20.

The decline was mainly due to moderation in household loans (May 6. 1%, June 5.2% year -on -year) mainly for passenger car, residential and credit card loans.

The growth of these loans has been affected by the extended lockdown since June 1.

A continued lockdown will be a major slowdown risk for the economy to recover as consumers will be more cautious about spending due to growing uncertainty.

Bank Negara said the non -performing loan ratio of the banking sector would remain generally stable in the near term - as banks continued to facilitate repayment assistance for borrowers who were facing financial difficulties.

The gross and net non-performing loan ratios remained unchanged at 1.6% and 1%, respectively, despite small monthly increases.

While it expects the non-performing loan ratio to remain stable in the near term, Bank Negara noted that banks continue to make additional provisions for potential credit losses, which currently stand at 1.8% of total non-performing loans of the banking system as a whole.

We expect Bank Negara to continue to maintain the Overnight Policy Rate (OPR) at its current low level throughout 2021 at its meeting next month.

This is based on the current challenging economic conditions, and it is too early for the National Bank to raise those rates this year.

This is also based on the prospect that economic activity will reopen gradually soon given the high vaccination rate and the expectation that the inflation rate will come down.

Shares of US-listed Chinese tech companies will face their worst month since the global financial crisis after investors sold their shares following Beijing regulators' crackdown on these companies.

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