Economic Highlights - Foreign Exchange Reserves Inched Up Marginally To US$95.0bn As At 30 July - 09/08/2010

◆ The foreign exchange reserves inched up slightly by US$0.19bn or RM0.7bn in 2H July to US$95.0bn or RM310.6bn as at 30 July, after rising by US$0.04bn or RM0.1bn in 1H July. 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 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$1.7bn or RM20.7bn (including revaluation loss) in January-July. At the current level, the foreign exchange reserves are sufficient to finance 7.9 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 Inched Up Marginally To US$95.0bn As At 30 July - 09/08/2010