KUALA LUMPUR (Sept 9): Malaysia's international reserves climbed to a new 10-year high in August, further strengthening its shield against market volatilities and external shocks.

Foreign exchange reserves totalled US$122.7 billion as at Aug 29, expanding by about US$700 million in just two weeks, according to a Tuesday statement from Bank Negara Malaysia (BNM). The central bank releases data on foreign exchange reserves every two weeks.

The build-up in reserves, alongside a strengthening ringgit, is providing a larger buffer for Malaysia to weather any sharp capital outflows. The ringgit has appreciated more than 6% against the US dollar so far this year.

The reserves are sufficient to finance 4.8 months of imports of goods and services, and are equivalent to 0.9 times the nation’s total short-term external debt, BNM said.

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 climbed to US$109.1 billion from US$108.4 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, remained unchanged at US$5.9 billion, while the central bank's gold holdings were also steady at US$4.1 billion.

Other reserve assets remained unchanged at US$2.3 billion.