RHB | Malaysia | Foreign Exchange Reserves Fell To USD131.8bn As At 31 July, 8 Aug 2014

Economic Research	8 August 2014
Malaysia
Economic Highlights
Foreign Exchange Reserves Fell To USD131.8bn As At 31 July The foreign exchange reserves dropped by USD0.1bn in July to USD131.8bn as at 31 July, after picking up by USD1.0bn in June. The ringgit extended its gains by 0.1% against the USD from 1-7 August, after appreciating by 0.3% in July. This suggests that the ringgit is regaining its strength, as the US Federal Reserve continued to pare down its monthly asset buying to USD25bn, its sixth straight USD10bn cut, keeping it on pace to end the programme by October, while interest rates will likely stay low for a considerable period. Locally, the ringgit was supported on expectations that Bank Negara Malaysia could increase borrowing costs once more this year. Meanwhile, the amount of excess liquidity (including repos) mopped up by the Central Bank fell to an estimate of MYR232.6bn at end-July, from MYR233.1bn at end-June and compared with MYR263.5bn at end-2013. Economist:  Peck Boon Soon  | +603 9280 2163 Economist:  Shafizal Shafaai  | +603 9280 2179