KUALA LUMPUR, May 6 — The headline inflation declined to -0.2 per cent in March 2020 from 1.3 per cent registered in February 2020, said Bank Negara Malaysia.
“The negative inflation reflected the decline in transport inflation due to lower retail fuel prices amid significantly weakened global oil prices,” the central bank said in its monthly highlights today.
The country’s economy last swung into deflation in the January-February period of last year, the first time since the aftermath of the global financial crisis in 2009. The Consumer Price Index (CPI) posted -0.7 per cent and -0.4 per cent in January and February 2019, respectively.
BNM said the underlying inflation, as measured by core inflation, remained stable at 1.3 per cent.
It said domestic financial markets had experienced a non-resident portfolio outflow amounted to RM17.7 billion (US$4.1 billion) in March as risk-off sentiments intensified amid heightened uncertainties on the severity and potential economic impact of the Covid-19 pandemic.
Despite the large-scale monetary and fiscal stimulus measures worldwide, global risk aversion remained elevated, it said.
“This led to higher demand for safer and more liquid assets such as cash and United States Treasury securities. In addition, the substantial decline in global oil prices further hampered sentiments in the global financial markets,” said BNM.
As a result, the ringgit depreciated against the US dollar by 1.8 per cent in March, the FTSE Bursa Malaysia KLCI declined by 8.9 per cent to close at 1,351 points, and the 10-year Malaysian Government Securities yield increased by 52.9 basis points.
These developments were in line with regional financial markets, it added.
— Bernama
