KL's reserves sharply fall

KL's reserves sharply fall

KUALA LUMPUR (AFP): Malaysia's international reserves fell by US$1.5 billion in the second half of last month, from 109.3 billion ringgit ($28.7 billion) to 103.3 billion ringgit, the central bank said Monday.

Bank Negara Malaysia said international reserves had been falling since May last year but added: "Whether there should be concern would depend on the underlying reasons..."

Last week Standard and Poor's cut the outlook on Malaysia's long-term foreign currency credit rating to stable from positive.

It cited the government's "unusually high" fiscal deficit, greater political uncertainty and an unexpected decline in international reserves.

The central bank attributed the fall in the second half of March partly to a quarterly exchange rate revaluation of its reserves -- which are held in several currrencies -- amid a rise in the dollar's value.

This resulted in a decline of $900 million.

Other factors were higher import payments and transfers and portfolio outflows, which accounted for $600 million.