The foreign exchange reserves edged up slightly by US$0.1bn or RM0.3bn in 1H August to US$95.1bn or RM310.8bn as at 13 August, after an increase of US$0.19bn or RM0.7bn in 2H July. This suggests that the repatriation of export proceeds and probably some inflow of foreign portfolio funds were more than enough to offset the payment of import bills. As it stands, the inflow of foreign portfolio investment in fixed income papers rose by RM2.3bn in June, after slowing down sharply to RM0.1bn in May and compared with a high of RM12.9bn in March.
As a result, total holdings in fixed income instruments by foreign portfolio investors inched up to RM96.1bn at end- June, the highest in almost two years and from RM93.8bn at end-May (Chart 1). Year-to-date, the foreign exchange reserves fell by US$1.6bn or RM20.5bn (including revaluation loss) for the January-13 August period. At the current level, the foreign exchange reserves are sufficient to finance 7.8 months of retained imports and cover 4.3 times the short-term external debt of the nation, compared with a high of 10.0 months of retained imports and 4.3x of shortterm external debt cover as at end-February.
Economic Highlights - A Slight Pick-up In Foreign Exchange Reserves, Ringgit Outlook Revised Upward To RM3....
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