Money Briefs: Malaysia's foreign reserves fall by $2.8b

Malaysia's foreign reserves fall by $2.8b

KUALA LUMPUR • Malaysia's international reserves fell by nearly US$2 billion (S$2.83 billion) in the last two weeks of November, and some economists expect the total to decline further this month.

Malaysia's central bank said yesterday that gross international reserves stood at US$96.4 billion as of Nov 30, down from US$98.3 billion on Nov 15. The reserves are at their lowest level since mid-March.

Bank Negara Malaysia said the reserves were sufficient to finance 8.3 months of retained imports and were 1.2 times the short-term external debt.

The ringgit has slid nearly 5 per cent since Nov 9 as foreign investors fled Malaysia's bond market after yields spiked on speculation that President-elect Donald Trump could impose stimulus policies that raise US inflation.

REUTERS

New fund to help China firms invest offshore

BEIJING • The Chinese government has launched a 150 billion yuan (S$30.9 billion) fund designed to support offshore investments by Chinese companies as well as the country's so-called new Silk Road initiative.

The first phase of the Guotong Fund, capitalised at 70 billion yuan, was registered on Nov 25 in Hangzhou, according to a statement posted on the website of the State-owned Assets Supervision and Administration Commission.

The statement cited equipment manufacturing as one type of offshore investment the fund might support, and said the new vehicle could play a role in mergers.

REUTERS

Surprise contraction in Australian economy

SYDNEY • Australia's economy shrank for the first time in more than five years last quarter as businesses, consumers and government all cut back on spending - an unexpected blow that will challenge policymakers' optimism on growth.

The Aussie dollar sank about half a cent after the Australian Bureau of Statistics reported gross domestic product fell 0.5 per cent in the third quarter from the second quarter, when it rose a revised 0.6 per cent.

It was the first contraction since early 2011 and only the fourth since the country's last recession in 1991. It was a major embarrassment to the conservative government of Prime Minister Malcolm Turnbull, which won an election in July on a promise of delivering growth and jobs. It was also chastening for the Reserve Bank of Australia, which has recently been sounding more upbeat on the economic outlook.

REUTERS

A version of this article appeared in the print edition of The Straits Times on December 08, 2016, with the headline 'Money Briefs'. Print Edition | Subscribe