Ringgit hovers near financial crisis peg as troubles mount

Singapore

PROTECTING the ringgit from political fallout out may end up costing Malaysia more than any bailout for the debt-ridden 1 Malaysia Development Berhad (1MDB) state fund, given the rate at which the central bank has been using its reserves in recent weeks.

Bank Negara Malaysia (BNM) has taken an iron-fisted approach, barely allowing the ringgit to move since early July as investors became increasingly unnerved by the deepening scandal over how 1MDB got into US$11 billion of debt.

On Tuesday, Prime Minister Najib Razak sacked his deputy, who had called on him to give Malaysians a better explanation of where 1MDB's money went. Three other ministers were also shunted in the reshuffle. Mr Najib also replaced the attorne…