Economic Highlights - Foreign Exchange Reserves Rose To US$95.9bn As - 22/09/2010

The foreign exchange reserves rose by US$0.65bn or RM2.0bn in 1H September to US$95.9bn or
RM313.3bn as at 15 September, compared with a marginal increase of US$0.15bn or RM0.5bn in 2H August. This
was likely to be driven by the repatriation of export proceeds and some inflow of foreign portfolio funds, which were
offset partially by the payment of import bills. As it stands, foreign portfolio investment in fixed income papers rose
by a larger magnitude of RM5.9bn in July, compared with +RM2.3bn in June and after slowing down sharply to
RM0.1bn in May. Consequently, their holdings in fixed income instruments 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$0.8bn. In ringgit terms, the reserves fell by RM18.0bn, 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 8.4 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 Rose To US$95.9bn As - 22/09/2010