KUALA LUMPUR: Bank Negara Malaysia (BNM) will lower the Statutory Reserve Requirement (SRR) ratio by 100 basis points, from 2% to 1%, effective May 16.
BNM said the decision to reduce the SRR is part of its continuous efforts to ensure sufficient liquidity in the domestic financial system.
“This will facilitate banks to better manage liquidity in an environment of greater financial market volatility and provide continued support for financial intermediation activity. The SRR reduction will release RM19 billion worth of liquidity into the banking system,” BNM said in a statement today.
The central bank said the SRR is an instrument to manage liquidity and is not a signal regarding the monetary policy stance. It added that the Overnight Policy Rate is the sole indicator used to signal the stance of monetary policy and is announced through the Monetary Policy Statement released after the Monetary Policy Committee meeting.
Separately, BNM said Malaysia’s international reserves expanded to US$118.70 billion (RM507.6 billion) as at April 30, 2025, from US$118.40 billion on April 15, 2025.
The central bank said the reserves position is sufficient to finance five months of imports of goods and services and is 0.9 times the total short-term external debt.
The main components of the reserves were foreign currency reserves (US$105.5 billion), the International Monetary Fund reserves position (US$1.3 billion), special drawing rights or SDR (US$5.8 billion), gold (US$3.8 billion) and other reserve assets (US$2.3 billion).
Total assets amounted to RM639.84 billion, comprising gold and foreign exchange and other reserves, including SDR (RM526.27 billion), Malaysian government papers (RM12.81 billion), deposits with financial institutions (RM7.59 million), loans and advances (RM26.89 billion), land and buildings (RM4.58 billion), and other assets (RM61.67 billion).
The central bank said total capital and liabilities amounted to RM639.84 billion, comprising paid-up capital (RM100 million), reserves (RM190.94 billion), currency in circulation (RM174.15 billion), deposits by financial institutions (RM149.65 billion), federal government deposits (RM4.78 billion), other deposits (RM77.86 billion), Bank Negara papers (RM10.57 billion), allocation of SDR (RM28.38 billion), and other liabilities (RM3.36 billion). – Bernama
