KUALA LUMPUR (July 22): Malaysia added US$300 million to its international reserves that had reached a fresh decade high by the middle of July.

Foreign exchange reserves totalled US$120.9 billion as at July 15, Bank Negara Malaysia (BNM) said in a statement, compared to US$120.6 billion at the end of June.

The buildup in reserves, alongside a strengthening ringgit, is providing a stronger shield for Malaysia to weather any sharp capital outflows. The ringgit has appreciated more than 5% against the US dollar so far this year while latest flash estimate showed that the country's economy has expanded faster than expected in the second quarter.

The current reserves position is sufficient to finance 4.8 months of imports of goods and services and is equivalent to 0.9 times the total short-term external debt, according to the central bank which releases data on foreign exchange reserves every two weeks.

Short-term external debt comprises borrowings from non-residents with a maturity of one year or less.

The borrowings are primarily by resident banks for their foreign currency liquidity operations, as well as by multinational corporations, including foreign banks, borrowing from their overseas parents or headquarters.

The borrowings can be met in the normal course of operations from their external asset holdings and do not pose any claims on BNM's international reserves.

Among components of the reserves, foreign currency reserves edged up to US$107.3 billion from US$107 billion, while Malaysia’s reserve position with the International Monetary Fund (IMF) remained steady at US$1.3 billion.

Special drawing rights, which are IMF-allocated reserve assets based on a basket of major currencies, remain unchanged at US$5.9 billion, while the central bank's gold holdings are also steady at US$4.1 billion.

Other reserve assets remained unchanged at US$2.3 billion.