kuala lumpur: Bank Negara Malaysia (BNM) Governor Datuk Sheikh Abdul Rashid Ghafoor said the licensing framework for digital insurance companies and takaful operators (DITOs) is expected to be released by the beginning of the second half of this year.
He said the central bank had received extensive feedback on the initial policy framework and was refining it based on industry comments.
“We are considering the response and will return to the framework (accordingly),” he said at a press conference announcing Malaysia’s economic performance for the first quarter of 2024 (2024) on Friday. Ta.
The central bank had published a discussion paper on DITO in 2022, outlining a proposed framework for licensing new digital insurance companies and takaful operators. Its aim is to contribute to a more inclusive, competitive and efficient insurance and takaful sector.
The framework aims to attract new digital players that address critical protection gaps between underserved market segments and offer innovative solutions to improve customer experience and increase trust. I am.
Meanwhile, Malaysia’s economy, as measured by gross domestic product (GDP), recorded growth of 4.2% in Q1 2024 (Q4 2023: 2.9%) due to an improvement in private spending and exports.
According to BNM, on a seasonally adjusted quarter-on-quarter basis, the economy expanded by 1.4% (Q4 2023: -1%), while headline inflation rose by 1.7% (Q4 2023: 1.6%) during the quarter. ).
BNM said the increase in headline inflation reflects adjustments to water tariffs in February and service tax on high electricity usage in March, which were 20.8% (Q4 2023: 2.1%) and 0.7% (2023), respectively. Q4: 0%) increase. . Core inflation slowed to 1.8% (Q4 2023: 2%) due to easing in the food and beverage sector.
The report said: “Inflation penetration gradually increased as the proportion of consumer price index items recording monthly price increases rose to 44.2% during the quarter (Q4 2023: 36.3%) ” he added.
Nevertheless, this is still significantly below the long-term average for the first quarter (corresponding to the first quarter of 2011 to 2019) of 52.2%, the company said.
BNM also said that domestic financial markets continue to be primarily driven by changes in financial market expectations regarding the monetary policy direction of major central banks.
“In particular, global financial markets reacted to expectations that the US Federal Reserve would maintain current policy rates for an extended period of time and reduce rates less, given continued strong US economic data.
“The current pressures reflect broader currency market trends and are not unique to Malaysia.”
BNM revealed that from the start of the year to May 15, the ringgit depreciated by 2.4% against the US dollar, in line with the movements of other regional currencies. The ringgit also appreciated by 0.5% based on the nominal effective exchange rate.
The central bank said it was putting into place the tools at its disposal to ensure that domestic financial markets remained orderly and continued to function efficiently.
Additionally, the government and BNM’s efforts with government-linked enterprises and government-linked investment companies, and engagement with companies and exporters are gaining momentum, resulting in larger and more stable flows of funds into the foreign exchange market. said.
“These are helping to ease pressure on the ringgit,” he said.
Average daily foreign exchange for the period February 26, 2024 to May 15, 2024 (January 2, 2024 to February 23, 2024: USD 15 billion) due to a narrowing of the bid-ask spread. Trading volume increased to US$17.6 billion (RM83.2 billion). , indicating increased liquidity in the domestic market.
