Ringgit weakens past 3.9 per dollar for first time in nearly 17 years
Published: 6 August 2015 5:00 PM
The ringgit fell to a new low of 3.90 in nearly 17 years. – Reuters pic, August 6, 2015.The ringgit weakened past 3.9000 per dollar on today for the first time since the Asian financial crisis 17 years ago as concern grew over a corruption scandal embroiling the prime minister and weakness in commodity prices.
The ringgit slid 0.7% to 3.9040 per dollar as of 0830 GMT (4.30pm Malaysian time).
It was the weakest level since September 2, 1998, the day before the government pegged it at 3.8000 per dollar, putting a floor under the currency to defend it against the ravages of the crisis whipping round the region.
Malaysia took the ringgit off the peg in 2005.
Kuala Lumpur stocks lost 1.8% today, underperforming most other Asian equities.
Most government bond prices fell. The five-year bond yield jumped to 3.720%, its highest since February 23. The 10-year yield rose to 4.113%, the highest since June 17.
Investors have been losing confidence in the country's assets as pressure grows on Prime Minister Datuk Seri Najib Razak amid graft allegations involving the indebted 1MDB state fund.
It is unclear how heavily the central bank can intervene to defend the worst-performing Asian currency this year, given a sharp drop in foreign exchange reserves.
Sentiment is also negative because weak commodity prices and a slowing Chinese economy may hurt Malaysia's exports and government finances.
Malaysian factory activity continued to shrink in July, a private survey showed on Monday. – Reuters, August 6, 2015.
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