It appears that the solid win by Datuk Seri Anwar Ibrahim in the Permatang Pauh elections wasn’t enough to allay foreign investors fears as they still fear political uncertainties. These fears are being translated into quick selling of the Ringgit which will only end up hurting the Malaysians.
The Ringgit further fell to a near 11-month low this week against the USD. It is now trading at approximately RM3.3925 against USD 1.
Read below for Bloomberg’s currency report.
Ringgit falls to near 11-month low
THE ringgit fell to near the lowest in 11 months on speculation overseas investors will sell the nation’s assets amid signs of faltering growth and heightened political turmoil. Bonds declined.
The currency dropped this week, extending a slump in August to 4 per cent, the worst month since a fixed peg to the dollar was ended in July 2005. Reports today may show Southeast Asia’s third-largest economy grew at the slowest pace in a year last quarter and the government’s budget deficit for 2008 will widen.
“There are crosswinds in the ringgit market because the political risks could turn for the worse in September,” said Goh Puay Yeong, a currency strategist at Barclays Capital Plc in Singapore. “Sentiment is weak and economic policies could come to a standstill” amid a power struggle, he said.
The ringgit traded at 3.3925 per dollar as of 2.50 pm in Kuala Lumpur, versus 3.3875 yesterday, according to data compiled by Bloomberg. It has lost 1.6 per cent this week and reached 3.3975 on August 27, the weakest since October 10.
Gross domestic product expanded 6 per cent, the slowest in a year, according to the median forecast in a Bloomberg News survey. Bank Negara Malaysia will report at 6 pm in Kuala Lumpur. The economy expanded 7.1 per cent in the first quarter.
Second Finance Minister Mohamed Yakcop said on August 4 the government will revise its budget deficit forecast when Prime Minister Datuk Seri Abdullah Ahmad Badawi presents the 2009 Budget in parliament at 4 pm today.