KUALA LUMPUR (Sept 7): RHB Research Institute Sdn Bhd said Malaysia’s foreign exchange (forex) reserves remain adequate by international standards after Malaysia’s forex reserves rose by US$1.1 billion to US$100.5 billion as at August 30.

In an economic update today, the research house said thiswas likely driven by the foreign inflow of funds into the fixed income market during the month.

“In ringgit (MYR) terms, the country’s forex reserves increased by MYR4.7 billion to MYR431.7 billion during this same period.

“At the current level, Malaysia’s forex reserves are sufficient to finance 7.8 months of retained imports and cover 1.1x the short-term external debt of the nation.

“The amount of excess liquidity – including repurchase agreements (repos) – mopped up by the central bank increased in August.

“This was on the back of an increase in its interbank borrowings and Bank Negara Malaysia bills, but partly offset by a decline in repos,” it said.

RHB Research however expects the MYR to recover gradually over time, as it has overshot on the downside from its fundamental value.