By BLOOMBERG
Malaysia’s foreign-exchange reserves rose above the US$95 billion (RM417.3 billion) mark for the first time since September after the central bank pledged to rebuild the holdings.
The reserves climbed 0.4% to US$95.3 billion in the last two weeks of December from the previous fortnight, according to a statement late Thursday from Bank Negara Malaysia. They declined below US$100 billion in July for the first time since 2010 on speculation the monetary authority intervened by selling dollars after the ringgit dropped below the level it was pegged at from 1998 to 2005. It ended the year as Asia’s worst-performing currency.
The holdings are enough to finance 8.5 months of retained imports and are 1.1 times the nation’s short-term external debt, the central bank said.
“The level of reserves during 2015 remained supported by the current-account surplus and inflows of foreign direct investment in an environment of reversal of flows,” Bank Negara said in the statement. “Malaysia’s international reserves are usable and are expected to be supported by trade and investment inflows in 2016.”
The ringgit is already off to a poor start in 2016 as a slump in Chinese stocks and depreciation in the yuan evoked memories of the August devaluation that caused a rout in global equities. Malaysia’s currency is down 2.2% so far this year and reached a three-month low on Thursday. It plunged 19 percent in 2015, the biggest loss since 1997.
The ringgit closed little changed at 4.3940 a dollar, after slipping as much as 0.8% as Brent dropped to the lowest level in more than 11 years, damping the outlook for Asia’s only major net oil exporter. The MSCI Emerging Markets Index of stocks decreased 2.5% to its lowest level since 2009 and a gauge of 20 developing-nation currencies fell to a record.
— By Liau Y-Sing
You must be logged in to post a comment.