Economic Highlights : Foreign Exchange Reserves Inched Up To US$95.3bn At End-August-07/09/2010

The foreign exchange reserves inched up slightly by US$0.15bn or RM0.5bn in 2H August to US$95.3bn or RM311.3bn as at 30 August, compared with an increase US$0.1bn or RM0.3bn in the 1H. This suggests that the repatriation of export proceeds and 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 RM5.9bn in July, faster than +RM2.3bn in June and after slowing down sharply to RM0.1bn in May. As a result, total holdings in fixed income instruments by foreign portfolio investors rose to RM102.0bn at end-July, the highest in two years and from RM96.1bn at end-June (Chart 1). Year-to-date, the foreign exchange reserves fell by US$1.5bn.
In ringgit terms, the reserves fell by RM20.0bn, after taking into account the revaluation loss due to the appreciation of the ringgit against major currencies. 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 short-term external debt cover as at end-February.


Economic Highlights : Foreign Exchange Reserves Inched Up To US$95.3bn At End-August-07/09/2010