KUALA LUMPUR (July 7): Malaysia’s international reserves expanded by over US$2 billion (RM8.1 billion) in just two weeks to end June at the highest level in 12 years, according to the central bank’s latest update.

Foreign exchange reserves totalled US$132.6 billion as at June 30, up from US$130.5 billion at the end of June 15, Bank Negara Malaysia (BNM) said in a statement on Tuesday. The central bank releases data on foreign exchange reserves every two weeks.

The reserves are sufficient to finance 4.7 months of imports of goods and services and cover 90% of the country’s short-term external debt, BNM said.

The build-up came as the ringgit was weakening, suggesting little intervention from the central bank comfortable with the depreciation. In June, the greenback rose more than 3% against the ringgit in line with gains against other major currencies amid a more hawkish US Federal Reserve.

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.

A breakdown of the reserves’ components showed that foreign currency reserves rose to US$117.2 billion from US$114.4 billion in mid-June while special drawing rights — reserve assets based on a basket of major currencies — rose to US$6 billion from US$5.9 billion.

Malaysia’s reserves at the International Monetary Fund were unchanged at US$1.3 billion. Gold, however, saw a decline to US$5.8 billion from US$6.5 billion, while other reserve assets fell to US$2.3 billion from US$2.4 billion.