KUALA LUMPUR: Malaysia's overall balance of payments (BoP) in the fourth quarter of 2017 registered a deficit of RM13.1bil in the fourth quarter of 2017 compared with a surplus of RM2.9bil in the third quarter.
Bank Negara said on Wednesday errors and omissions, which included revaluation changes on the central bank's international reserves, amounted to -RM31.0bil or -6.7% of total trade.
It said in Q4 of 2017, the financial account registered a net inflow of RM5bil, which was in contrast with the net outflow of RM1.2bil in Q3.
“This was supported by portfolio investment inflows by both residents and non-residents, foreign direct investments (FDI) and some liquidation of direct investments abroad (DIA) assets by Malaysian companies.
“These inflows were partially offset by outflows arising from banks’ liquidity and treasury management operations,” it said.
Bank Negara said the portfolio investment account registered a net inflow of RM11.7bil (Q3 2017: net outflow of RM5.1 bil), due mainly to non-resident portfolio investments, which recorded a higher net inflow of RM7.7bil (3Q: net inflow of RM3.7bil).
“Better-than-expected economic performance, higher corporate earnings and improvement in global oil prices provided support to investor sentiments in the domestic financial markets,” it said.
As for resident portfolio investments, there was a net inflow of RM4bil (3Q: net outflow of RM8.8bil), as domestic institutional investors liquidated some of their bond holdings abroad.
It pointed out the direct investment account registered a net inflow of RM5.1bil (3Q: net inflow of RM6.2bil), due to continued FDI inflows and a reversal of DIA flows during the quarter.
“FDI amounted to a smaller net inflow of RM2.8bil (3Q: net inflow of RM11.2bil), due mainly to lower equity capital injections from parent companies and a moderation in retained earnings,” it said
Bank Negara pointed out that FDI inflows were mainly in the services sector, particularly the real estate and wholesale and retail trade sub-sectors, followed by the mining and construction sectors.
It also said the DIA by Malaysian companies also recorded a net inflow of RM2.3bil (3Q: net outflow of RM5bil), due to a net liquidation of equity capital and a net repayment of intercompany loans from subsidiaries and affiliates abroad.
Sectors which recorded inflows were the mining and services sectors, particularly the financial services sub-sector.
As for the other investment account, it recorded a larger net outflow of RM10.9bil (3Q: net outflow of RM3.3bil), due mainly to the placements of currency and deposits abroad by domestic financial institutions.