Bank Negara Reserves still robust

From the Edge:

KUALA LUMPUR (July 7): Bank Negara Malaysia’s (BNM) international reserves as at June 30 amounted to RM398.1 billion (US$105.5 billion), which is 0.96% or RM3.8 billion higher than RM394.3 billion as at May 29.

In its statement today, the central bank said the reserves' position is sufficient to finance 8.2 months of retained imports and is 1.1 times the short-term external debt.

Foreign currency reserves make up US$96.9 billion or 91.8% of total international reserves.

BNM’s international reserves has fell to RM390.2 billion in mid-June, from RM394.3 billion on May 29, mainly due to large outflow of foreign funds, putting pressure on the local currency.

Foreign Reserves don't appear to be declining as the ringgit fundamentally right now is still alright.  I've said it all along, but I really can't explain the predicament other than the ringgit market is extremely illiquid and no one wants to take a long ringgit stance  at this point.  This will likely continue until bad economic news hits the markets in the next few months.

At that point, likely the market may range due to the profiting on the news phenomena.

The Ringgit will likely endure the pain for now.

It is possible that more illiquid markets will tend to move before the news hits, while the liquid markets move as the news evolve and are more stubborn.