[KUALA LUMPUR] Malaysia's central bank on Thursday denied reports that it has issued a circular prohibiting local banks from taking orders for transactions from offshore banks at the daily fixing rates, according to a spokeswoman.
Local newspaper The Sun reported earlier on Thursday that the central bank, or Bank Negara Malaysia, has issued the ban after the ringgit plunged to 4.10 to the dollar last Friday. Foreign exchange reserves also dropped to below the US$100 billion threshold in July. "There is no such thing," Bank Negara Malaysia's spokeswoman said when contacted by phone.
The ringgit is the worst performing emerging Asian currency this year, and has fallen to pre-peg 17-year lows. Analysts say one reason is reduced confidence in Malaysia as indebted state fund 1Malaysia Development Bhd is being probed for financial mismanagement, triggering a political crisis for Prime Minister Najib Razak.