Reserves up after months of dips

KUALA LUMPUR: The country’s international reserves rose RM1.3bil to RM357.7bil (US$94.7b) as at Aug 28 from two weeks ago, Bank Negara said.

This is the first rise after having dipped the last couple of months.

“The reserves position is sufficient to finance 7.4 months of retained imports and is one time the short-term external debt,” the central bank said. Reserves started to increase from the RM356.4bil (US$94.5b) level on Aug 14.

Short-term external debt includes short-term offshore borrowing, non-resident holdings of short-term ringgit debt securities, non-resident deposits with the banking system and other short-term debt.

According to the data, the international reserves have fallen from RM405.5bil (or US$116.0bil) as at Dec 31, 2014 compared with RM441.9bil (US$134.9bil) as at end-2013. It dipped below US$100bil – the first time since 2010 – to US$96.7bil as at July 31, Bloomberg reported.

Some analysts have attributed rising concerns on the declining reserves that also led to the depreciating local currency.

Analysts said the increased level of reserves may see interest returning to the local currency in the short term, coupled with oil prices which have sustained some of the gains from the recent rebound.

Meanwhile, Reuters reported that Malaysia saw its exports increase in July by 3.5% from a year earlier as demand for electrical and electronic goods surged, Government data showed.

According to the median forecast from a Reuters poll, economists had forecast exports would rise 3.2% on the back of a weakening ringgit currency, although individual estimates varied.