Foreign holding of Malaysian bonds reached an all-time high in July 2023 at RM279.2 billion. Holdings of govvies, totalled RM266.3b, accounted for 24.0% of the total outstanding government bonds, the highest in 14 months and surpassing the pre-pandemic year average (2019 average: 23.1%).
The share of government bonds in the total foreign holdings of Malaysian bonds saw a marginal decline to 95.4% (Jul-23: 95.6%) as foreign interest on Malaysian corporate bonds rose by +8.3%mom to RM12.9b. The faster inflows into the Malaysian bond market since May 2023 were attributable to the resolution of the US debt ceiling, which saw investors moving away from the safety of the USD.
The momentum continued until July on fading expectations for another hike by the Fed, as the US central bank is nearing the end of its tightening cycle
