Malaysia’s ringgit rout raises spectres of 1998 Asian Financial Crisis
Currency hits levels last seen in 1998 as uncertainty over Trump, interest rates and 1MDB scandal create perfect storm – but government denies capital controls could be on the cards
The beaten down Malaysian ringgit is showing no signs of catching a break in the tail end of 2016.
The currency on Tuesday hovered near its lowest level since the height of the 1998 Asian Financial Crisis, as it reeled from a perfect storm of bearish factors including uncertainty about Donald Trump’s impending presidency in the United States, the acceleration of US interest rate hikes and a long-running corruption scandal linked to Prime Minister Najib Razak.
Some observers said the slump – the ringgit is poised to finish the year as Asia’s worst performing currency for a second year running – raised the spectre of a repeat of the controversial capital controls imposed in 1998.
The government has so far swatted away suggestions it will re-introduce such measures.
The ringgit traded at 4.4798 in Tuesday afternoon trade in Asia, according to Bloomberg. It had fallen to 4.4805 on Monday, its weakest point since January 1998.
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It has lost six per cent since Trump’s shock victory in the US presidential election on November 8.