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Foreign fund outflow a bane for ringgit

Foreign holdings of Malaysian govt bonds at 25% in March, highest since April 2018

KUALA LUMPUR (April 8): Foreign holdings of Malaysian government bonds, namely Malaysian Government Securities (MGS) and Government Investment Issue (GII), rose by RM4.4 billion to RM215 billion or 25% of total outstanding in March the highest share since April 2018. Foreign investors holdings of MGS rose RM1.5 billion to RM184.6 billion, equivalent to 40.8% of total MGS outstanding. Meanwhile, foreign holdings of GII stood at RM30.7 billion, equivalent to 8% of total GII outstanding in March, said UOB Global Economics and Market Research. The bond inflows were resilient compared to sharper sell-offs of emerging market debt in March amid steepening yield curves. As policy rates are projected to remain flat for 2021 and major central banks are expected to continue bond purchases to smooth out the yield path, we think foreign flows into Malaysia s bonds will remain supported, it said in its Flash Note today.

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