KUALA LUMPUR, Oct. 5 (Xinhua) -- Malaysia's financial stability risks from the Middle East conflict remain manageable, with banks, households and domestic financial markets showing resilience, its central bank said on Monday.
Bank Negara Malaysia (BNM) said in a report that Malaysia had limited direct financial exposures to the Middle East, with the main spillovers occurring through the real economy and global financial markets.
BNM highlighted that business loan quality remained broadly sound, although repayment pressures emerged among some small and medium-sized enterprises in transportation, wholesale and retail trade and primary manufacturing. The business loan impairment ratio stood at 2.8 percent in June.
Household balance sheets also remained resilient, with the median debt service ratio at 32.1 percent.
BNM said banks remained well positioned to absorb shocks, with a total capital ratio of 17.9 percent and a liquidity coverage ratio of 149.6 percent.
However, the central bank warned that a prolonged or further escalation of the conflict could trigger larger commodity price shocks, supply disruptions and weaker global growth, warranting continued vigilance. ■
