♦ The foreign exchange reserves increased by US$0.44bn in 1H April to US$95.7bn as at 15 April, compared with a decline of US$1.5bn in 2H March. This suggests that the repatriation of export proceeds and some inflow of foreign portfolio funds were more than enough to pay for import bills. Although the foreign portfolio investment in fixed income papers fell by RM1.0bn in February, the first decline in eight months and compared with an increase of RM4.1bn in January, we believe the decline is likely to be temporary and the holding of fixed income papers by foreign investors is likely to have bounced back in March-April. Meanwhile, total holdings in fixed income instruments by foreign portfolio investors fell to RM72.3bn at end-February, after rising to a 17-month high of RM73.3bn at end-January (Chart 1). In ringgit terms, the foreign exchange reserves rose by RM1.4bn in 1H April to RM313.1bn as at 15 April, a rebound from a decline of RM20.0bn in 2H March, as the decline in the previous month was affected by a revaluation loss following the appreciation of the ringgit against major currencies in 1Q 2010. At the current level, the foreign exchange reserves are sufficient to finance 8.8 months of retained imports and cover 4.0 times the short-term external debt of the nation, compared with 8.1 months of retained imports and 4.0x of short-term external debt cover a year ago.
Economic Highlights : Foreign Exchange Reserves Rose To US$95.7bn As At 15 April -23/04/2010
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