Malaysia’s central bank, Bank Negara Malaysia (BNM), has announced a robust state of its foreign reserves. The bank’s latest data, revealed in alignment with the International Monetary Fund’s Special Data Dissemination Standard (SDDS), shows that Malaysia’s international reserve assets stand at a substantial US$114.42 billion. In addition, other foreign currency assets have been reported at US$601.3 million.
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Forward-Looking Financial Snapshot
In its commitment to providing a transparent and detailed financial breakdown, BNM has also outlined the expected future inflows and outflows of foreign exchange for the coming year. This provides a forward-looking snapshot of the federal government’s and BNM’s financial plans, aiding in the understanding of the country’s economic landscape.
Short-Term Outflows and Inflows
BNM anticipates that the pre-determined short-term outflows of foreign currency loans, securities, and deposits will amount to US$16.15 million. This figure includes the scheduled repayment of external borrowings by the government and the maturity of foreign currency BNM interbank bills.
Conversely, the bank has projected foreign currency inflows of US$2.23 billion over the next 12 months. This figure, however, excludes income from interest and the drawdown of project loans, in line with a practice adopted by BNM since April 2006.
Financial Management and Contingencies
As a part of its financial management strategy, BNM has reported net short forward positions of US$22.99 billion. This reflects the bank’s active engagement in managing ringgit liquidity in the money market.
BNM also highlighted a single contingent short-term net drain on foreign currency assets: government guarantees of foreign currency debt due within a year, amounting to US$371.0 million.
BNM’s Financial Practices
In the interest of clarity, BNM has stated that it does not engage in foreign currency loans with embedded options. It also confirmed that it does not have any undrawn, unconditional credit lines with other central banks, international organisations, or financial institutions. Furthermore, the bank does not engage in foreign currency options vis-à-vis ringgit.
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