Malaysian ringgit hits fresh 42-month low on sales<\/p>\n
KUALA LUMPUR (Reuter): The Malaysian ringgit extended its
\nfreefall against the dollar yesterday, hitting a 42-month low on
\nsales from offshore investors, and most foreign exchange dealers
\nexpect further losses.<\/p>\n
At 0730 GMT, the ringgit was languishing at 2.7337\/47 to the
\ndollar -- its weakest level in 42 months.<\/p>\n
Though dealers generally feel the ringgit should find support
\nsoon, some have not ruled out a slide to 2.80, a level last seen
\nin July 1991.<\/p>\n
\"It's difficult to say at this point where the ringgit is
\nheading, but I don't think we have seen the bottom yet,\" a dealer
\nwith a Malaysian bank said.<\/p>\n
\"Obviously 2.80 is the next psychological level.\"<\/p>\n
The currency has remained under selling pressure since
\nplunging two percent late on Friday shortly after Prime Minister
\nMahathir Mohamad said he was happy with the ringgit's level,
\ndealers said.<\/p>\n
They said Mahathir's remarks were taken to mean that the
\ncentral bank, Bank Negara Malaysia, would allow the ringgit to
\nfind its own level and would not intervene to stop the local unit
\nfrom being sold.<\/p>\n
\"This was the last thing that the ringgit needed, given (that)
\nregional currency woes (were) still pretty much unresolved, thus
\nopening the way to more ringgit downside,\" research house
\nI.D.E.A. said in a Monday morning commentary.<\/p>\n
A dealer with a European bank in Singapore said: \"Buying
\ninterest in dollar\/Malay among offshore parties is still very
\nstrong, especially U.S. funds and Hong Kong parties.\"<\/p>\n
\"I think offshore parties are still short ringgit and long
\nU.S. dollars, but it is the reverse onshore. Local commercials
\nhave not fully hedged their dollar positions.\"<\/p>\n
The ringgit, like other Southeast Asian currencies, has been
\nhit by speculative attacks over the past month, losing about nine
\npercent of its value.<\/p>\n
The Bank Negara spent $2.0-3.0 billion of its reserves in June
\nto defend the currency.<\/p>\n
Dealers said they were surprised by Mahathir's remarks,
\nfollowing his stinging verbal attacks on speculators and the
\nintroduction of capital control measures.<\/p>\n
Bank Negara last week ordered local banks to limit non-trade
\nrelated currency swaps to $2.0 million with each overseas
\ncustomer, in an attempt to reduce foreigners access to the
\nringgit.<\/p>\n
Dealers and analysts said the ringgit was also pressured by a
\nweak Malaysian stock market and fears of possible overheating in
\nthe economy.<\/p>\n
Local shares continued to be battered by foreign selling, with
\nthe benchmark Composite Index falling 2.84 percent to 905.87 at
\nthe morning close on Monday.<\/p>\n
Concern about the economy followed Malaysia's surprisingly
\nhigh loans and monetary growth figures for June, despite steps by
\nBank Negara to curb them.<\/p>\n
Bank Negara announced last Wednesday that broad money supply
\nor M3, grew by 21.9 percent year-on-year in June against 20.3
\npercent in May and 22.9 percent in the same month last year.<\/p>\n
Loans growth in June rose to an annualized 30 percent from
\n29.5 percent at the end of May.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/malaysian-ringgit-hits-fresh-42-month-low-on-sales-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}