-  Malaysia’s forex reserves at BNM continued to deplete for the fourth consecutive month in February 2014. The international reserves fell by 1.9% MoM (or -USD2.5bil) to USD130.6bil as at end-Feb.

-  Since October 2013, overall reserves declined by a cumulative USD6.5bil (or -4.7%) as BNM had probably intervened in the currency market to ensure orderly fluctuation of the Ringgit.

-  In Ringgit terms, overall reserves slipped by 1.9% MoM (or -RM8.37bil) to RM427.59bil in February as the outflow of funds persisted.

-  The reserves position is sufficient to finance 9 months of retained imports and is 3.3 times the short-term external debt.

-  That said, the continued surplus in the current account will mitigate the outflow of short-term funds. Net trades amounted to RM6.36bil in January.

-  At the close of 28 Feb, Ringgit stood at RM3.277 per USD which was broadly unchanged from end-2013. However, the Ringgit had strengthened by 2.1% MoM in February.

-  Note that the Ringgit had depreciated by 7.1% YoY to close at RM3.276 per USD on 31 Dec 2013.

-  Elsewhere, excess liquidity in the financial system depleted by approximately 8.6% MoM (or -RM22.53bil) to RM239.46bil in January.

-  Meanwhile, foreign holdings of MGS held up well during the start of the year. Total foreign holdings of MGS advanced by 0.6% MoM (or +RM822.65mil) to RM 137.93bil in January.

-  Nonetheless, total outstanding MGS grew by 1.3% MoM (or +RM4.0bil) to RM309.08bil in January.

-  As such, overall holdings by foreigners as a percentage of total outstanding MGS slipped by 0.3ppt to 44.6% in January. (December: 44.9%) 

Source: AmeSecurities