Malaysia: FX Reserves increased in December

Senior Economist Julia Goh and Economist Loke Siew Ting at UOB Group review the latest FX reserves figures in the Malaysian economy.

Key Takeaways

“Malaysia recorded foreign portfolio outflows for a fourth consecutive month in Dec (at -MYR2.4bn vs -MYR1.3bn in Nov), taking the full-year non-resident portfolio outflows to MYR5.6bn in 2022 (2021: +MYR30.4bn). Dec’s foreign portfolio outflows were broad based, led by Malaysian equity outflows of MYR1.5bn (Nov: -MYR0.3bn) against Malaysian debt securities outflows of MYR0.9bn (Nov: -MYR1.0bn). However, the 2022 full-year non-resident portfolio outflows of MYR5.6bn were solely driven by debt outflows (-MYR9.8bn) as the equities segment recorded cumulative inflows of MYR4.2bn last year.”

“Bank Negara Malaysia (BNM)’s foreign reserves posted the largest monthly gain in 16 months by USD4.9bn m/m in Dec to end the year of 2022 at USD114.6bn (end-Nov: +USD4.5bn m/m to USD109.7bn). The latest reserves level has considered the quarterly foreign exchange revaluation changes. It is sufficient to finance 5.2 months of imports of goods and services and is 1.0 time of the total short-term external debt.”

“Going forward, we expect financial market’s volatility to persist but the prospects of foreign buying interest returning to emerging market (EM) assets have somewhat brightened following China’s reopening from 8 Jan 2023. The current market expectations for the US Fed reaching the peak of its interest rate hike cycle by 1Q23 alongside a continuation of China’s economic stimulus and consensus of still positive growth outlook for most Asian countries versus a projected mild recession in major advanced economies have also augured well for EM currencies including MYR.”

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.