Headline inflation edged higher to 1.4% in November

• In November, headline inflation rose slightly to 1.4% (October: 1.3%), while core inflation^[1] remained unchanged at 2.2% (October: 2.2%).
• The uptick in headline inflation was partly driven by higher cigarette prices following the increase in excise duty^[2] and food-at-home prices, particularly fresh meat and fish.
• Core inflation remained stable, reflecting steady underlying price pressures. Higher inflation in mobile communication services and motor vehicles were offset by lower inflation in jewellery and watches and audio-visual services.

Higher growth in manufacturing production

• The Manufacturing Industrial Production Index registered higher growth of 6.5% in October 2025 (September 2025: 5%).
• Export-oriented clusters strengthened to 7.2% (September 2025: 4.8%) driven mainly by electrical and electronics (E&E) and machinery and equipment.
• Domestic-oriented clusters eased to 4.9% (September 2025: 5.3%), supported by robust growth in food and beverage (F&B) and pharmaceuticals, offsetting the contraction in motor vehicle production.

Broadly sustained growth in credit to the private non-financial sector

• Credit to the private non-financial sector grew by 5.5% in November 2025 (October 2025: 5.7%), supported by steady growth in outstanding loans (5.5%; October 2025: 5.6%), while growth in outstanding corporate bonds moderated slightly (5.5%; October 2025: 5.8%).
• Business loan growth moderated to 5% (October 2025: 5.5%), following slower loan growth among SMEs. Loan growth among non-SMEs increased, particularly for investment-related purposes^[3].
• Household loan growth remained stable at 5.7% (October 2025: 5.7%) amid sustained loan growth across most purposes.

Banks’ liquid asset buffers remained adequate against potential liquidity shocks

• The banking system continued to record healthy liquid asset buffers with an aggregate Liquidity Coverage Ratio of 145.6% (October 2025: 147.5%).

Asset quality in the banking system continued to be sound

• Gross impaired loans ratio remained stable at 1.4%. Net impaired loans ratio recorded a marginal uptick to 1% (October 2025: 0.9%) due to lower provisions recorded for the month.
• Loan loss coverage ratio (including regulatory reserves) remained prudent at 124.6% of gross impaired loans (October 2025: 126.5%).

Domestic financial markets were influenced by shifting expectations of US monetary policy path

• Global financial conditions were influenced by evolving market expectations throughout the month on further US Federal Reserve (Fed) monetary policy easing.
• Against this backdrop, the ringgit appreciated against the US dollar by 1.5% in November (NEER: 1.7%; regional average^[4]: -0.3%) driven by non-resident portfolio inflows into the domestic bond market. These inflows occurred alongside the decline in the 10-year MGS yield by 2 bps (regional average⁴: +13.6 bps).
• Meanwhile, the FBM KLCI declined by 0.3% (regional average⁴: -0.1%) amid net foreign equity outflows, while regional equity market performance was mixed.

Monthly Highlights [PDF]

^[1] Core inflation is computed by excluding price-volatile and price-administered items.

^[2] The Government announced in Budget 2026 an increase in excise duty on cigarettes (+2 sen per stick) effective 1 November 2025. This increase in cigarette prices is captured in the ‘Others’ category.

^[3] Comprises loans for the purchase of non-residential properties, residential properties for business use, fixed assets as well as for construction activities.

^[4] Regional countries comprise Singapore, Thailand, the Philippines, Indonesia and South Korea.