Malaysia raising US$2b as worst Asia currency saps forex reserves

Kuala Lumpur

MALAYSIA is tapping the US dollar bond market for the first time in four years as it burns through foreign-exchange reserves defending Asia's worst currency.

The government is poised to sell as much as US$2 billion of Islamic notes this week, one month after state-owned Petroliam Nasional Bhd issued a record US$5 billion of sukuk and conventional debt in the US currency. Malaysia's foreign currency holdings fell 9.4 per cent this year, the steepest first-quarter loss since the 1997 Asian financial crisis. The ringgit dropped 5.4 per cent, compared with a 4.6 per cent slump in the Indonesian rupiah.