Saturday, June 6

Malaysia’s reserves remain usable, unencumbered — BNM


KUALA LUMPUR: The detailed breakdown of Malaysia’s international reserves under the International Monetary Fund’s Special Data Dissemination Standard (IMF SDDS) format indicates that as at end-August 2014, the country’s reserves remained usable and unencumbered.

Bank Negara Malaysia (BNM) in a statement yesterday explained that in accordance with the IMF SDDS format, the detailed breakdown of international reserves provides forward-looking information on the size, composition and usability of reserves and other foreign currency assets.

It also provides the expected and potential future inflows and outflows of foreign exchange of the Federal Government and BNM over the next 12-month period.

Earlier this month, BNM reported Malaysia’s international reserves stood at US$132 billion (US$1 = RM3.27) as at Aug 29, 2014.

It said the reserves position is sufficient to finance nine months of retained imports and is 1.2 times the short-term external debt.

Besides the official reserve assets as reported earlier, BNM in its detailed breakdown of international reserves based on the SDDS format yesterday, showed its other foreign currency assets as amounting to US$5.62 billion as at end-August 2014.

The disclosure indicated that the pre-determined short-term outflows of foreign currency loans would amount to US$1.50 billion, arising from scheduled repayments of external borrowings by the government .

The central bank said in line with the practice adopted since April 2006, the data excludes projected foreign currency inflows arising from interest income and the drawdown of project loans amounting to US$2.70 billion in the next 12 months.

Meanwhile, the detailed breakdown also showed the long forward positions amounted to US$1.05 billion as at end-August.

BNM said the only contingent short-term net drain on foreign currency assets were government guarantees of foreign debt due within one year, amounting to US$227.8 million.

“There are no foreign currency loans with embedded options, no undrawn, unconditional credit lines provided by or to other central banks, international organisations, banks and other financial institutions. We also do not engage in foreign currency options vis-a-vis the ringgit,” the statement said. — Bernama