Economic Highlights - Foreign Exchange Reserves Remained Relatively - 23/07/2010

The foreign exchange reserves remained relatively stable, inched up marginally by US$0.04bn or RM0.1bn in 1H July to US$94.8bn or RM309.9bn as at 15 July, after a decline of US$1.34bn or -RM4.6bn in 2H June. This suggests that the repatriation of export proceeds was offset by some outflow of foreign portfolio funds and payment of import bills. As it stands, the inflow of foreign portfolio investment in fixed income papers slowed down sharply to RM0.1bn in May, from +RM8.5bn in April and a high of RM12.9bn in March. As a result, total holdings in fixed income instruments by foreign portfolio investors remained relatively stable at RM93.8bn at end-May, compared with RM93.7bn at end-April and RM85.2bn at end-March (Chart 1). At the current level, the foreign exchange reserves are sufficient to finance 8.0 months of retained imports and cover 4.4 times the short-term external debt of the nation, compared with a high of 10.0 months of retained imports and 4.3x of short-term external debt cover as at end-February

Economic Highlights - Foreign Exchange Reserves Remained Relatively - 23/07/2010