KL warns speculators to stay away from ringgit<\/p>\n
KUALA LUMPUR (AFP): Malaysia issued fresh warnings to currency
\nspeculators yesterday against attacks on the ringgit amid
\nlingering market jitters over the recent crisis in neighboring
\nThailand.<\/p>\n
Acting Prime Minister Anwar Ibrahim, who is also finance
\nminister, said he had full confidence in central Bank Negara's
\nhandling of speculation against the ringgit, Bernama news agency
\nreported.<\/p>\n
He said Bank Negara was doing whatever it can to continue to
\nmonitor the situation and ward off speculation against the local
\ncurrency, which appeared to be firming Thursday following
\nofficials' assurance of support.<\/p>\n
At 0430 GMT Thursday, the ringgit was quoted at 2.4980-2.4990
\nagainst the US dollar, dealers here said. It was trading at
\n2.5035-2.5050 late Wednesday.<\/p>\n
Anwar said there was no reason for the strength of the ringgit
\nto be undermined given the country's current stability and strong
\neconomic fundamentals.<\/p>\n
Separately, economic adviser to the government Daim Zainuddin
\nsaid Bank Negara had enough reserves to support the ringgit
\nagainst speculators, and that Malaysia knew in advance that the
\nspeculators were coming.<\/p>\n
\"If they still want to take the risk, they will have to face
\nthe consequences. Bank Negara has taken action. They will lose
\nout,\" he added at an international fund managers' conference in
\nKuala Lumpur.<\/p>\n
Daim said he could not estimate the amount of speculative
\nfunds that had arrived in Malaysia, which had foreign reserves of
\nabout 28 billion US dollars at the end of June.<\/p>\n
He said the speculators are now trying to attack as many
\ncurrencies as possible.<\/p>\n
The Thai baht has plunged since the government decided to
\nfloat the currency last week, triggering speculative attacks on
\nthe ringgit as well as the Philippine peso. This set off
\nimmediate intervention by central banks in Manila and Kuala
\nLumpur.<\/p>\n
Asked about investor confidence in the Kuala Lumpur Stock
\nExchange (KLSE), Daim said: \"We have told investors repeatedly
\nthat Malaysia's economy is not like Thailand. If they still
\ncontinue to believe in the speculation, what can we do?\"<\/p>\n
Share prices closed the morning sharply lower across the
\nboard, with sentiment undercut by concerns over the ringgit,
\nhigher interest rates and regional currency volatility, dealers
\nsaid.<\/p>\n
The KLSE composite index closed down 19.79 points at 1,013.45.
\nDaim said local funds should take advantage of the cheap stocks
\navailable now and to start leading the market.<\/p>\n
\"Our local bourse is not a mature market. The local investors
\nlike to allow others to take the lead. The market has fallen. So,
\nlocal funds should start buying,\" he added.<\/p>\n
As to the economy, Daim dismissed speculation that Malaysia is
\nlikely to repeat Thailand's economic experience, saying Bank
\nNegara had taken pre-emptive measures to prevent any economic
\ndownturn.<\/p>\n
He cited the central bank's recent curbs on lending to the
\nproperty and share financing sectors as an example.<\/p>\n
\"Thailand is different. They have cheap source of funds and
\nthe baht is pegged to the dollar,\" Daim said.<\/p>\n
He said political stability in the country was one of
\nMalaysia's strongest points in sustaining economic growth.<\/p>",
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