Bank Negara Malaysia says West Asia war poses limited risk to domestic financial stability

Bank Negara Malaysia warned that the West Asia conflict is a key downside risk to the global economy, raising energy prices and market volatility. Nevertheless, the bank says Malaysia's financial sector has limited direct exposure, with most transmission occurring through the real economy and global markets. Indicators such as a 17.9% total capital ratio, a 2.8% business loan impairment ratio and a 1.4% aggregate impairment ratio show resilience.

Liquidity remains sufficient, and insurers and takaful firms hold capital adequacy ratios around 225%. Overall business activity stays stable thanks to strong domestic demand and continued export performance.