Highlight Bank Negara foreign reserves up 0.94% to US$97b as at March 31, 2016

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Bank Negara foreign reserves up 0.94% to US$97b as at March 31, 2016

By Meena Lakshana / theedgemarkets.com   | April 7, 2016 : 6:12 PM MYT  


KUALA LUMPUR (April 7): The international reserves of Bank Negara Malaysia (BNM) gained 0.94% to US$97 billion (RM381.6 billion) as at March 31, 2016 from US$96.1 billion (RM412.3 billion) on March 15, 2016, due to changes in the foreign exchange revaluation following a stronger ringgit.

In a statement today, BNM said the decline in reserves level in ringgit terms at RM381.6 billion compared to RM412.3 billion on March 15, 2016 was mainly due to the quarterly adjustment for the foreign exchange revaluation changes following the strengthening of the ringgit against various currencies during the first quarter.

The central bank said the reserves position is sufficient to finance eight months of retained imports and is 1.1 times the short-term external debt.

The ringgit had strengthened to a seven-month high of 3.865 against the US dollar on Monday before declining to 3.922 in Tuesday's trade.

Reuters reported yesterday that the ringgit led gains among emerging Asian currencies as a rebound in oil prices helped risky assets, including regional equities, recover some of the previous session's losses.

The ringgit was boosted by stronger-than-expected Malaysia trade data.

Malaysia's exports in February rose 6.7% from a year earlier, more than double economists' forecast for 3.1% growth, thanks to higher shipments of electrical and electronic, palm oil and timber products.

AmBank Group, in its foreign exchange research and strategy report, said on Wednesday the ringgit could continue to see more upside against the US dollar, despite the two-day correction seen since Monday.

The research firm said the strengthening of the ringgit would likely continue into the first half of the year, aided by the supportive seasonality of Petroliam Nasional Bhd's dividend repatriation although it would be smaller at RM16 billion compared to RM26 billion in 2015, the additional transfer of government-linked companies-related overseas asset sales, further foreign inflows into local bond markets and a stable yuan exchange rate.

Meanwhile, oil prices rallied on Wednesday on an unexpected decline in US crude stockpiles.

The May 2016 futures contract for West Texas Intermediate (WTI) crude oil closed 0.08% higher at US$37.78 per barrel while the June 2016 futures contract for Brent crude oil ended 0.35% higher at US$39.98 per barrel.

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