Malaysia international reserves stand at RM429 billion

KUALA LUMPUR: International reserves of Bank Negara totalled RM429 billion as at end February 28.

The reserves are sufficient to finance 9.5 months of retained imports and is 4.6 times the short-term external debt, said Bank Negara yesterday.

CIMB Investment Bank expects foreign private capital inflows into equity and bond markets to continue with easy global monetary conditions, combined with higher domestic growth prospects and attractive yield differentials.

Foreigners remained net buyers of Malaysian equities to the tune of RM1.7 billion in February for the third straight month (RM2.5 billion in January and RM0.8 billion in December 2012).

Foreign-owned Malaysian debt securities surged to RM229 billion at end January 2013 (RM225.4 billion at end-2012) and foreign shareholdings of Malaysian Government Securities hit a new high of 44.6 per cent as at end-January.

But the rise in foreign reserves was smaller than that of regional peers, partly due to the looming general election, CIMB noted.

"Overall, given the external and domestic drivers, we expect a moderate pace of growth for foreign reserves throughout 2013."

For end-2013, foreign reserves target is US$144.6 billion (versus US$139.7 billion at end-2012).