Malaysia's banking system grapples with dollar squeeze

Singapore

THERE is a dollar squeeze in Asia, but it's nothing like the crunch of 2013.

Unlike three years ago, the banking system most exposed to tight hard-currency funding conditions isn't India. It's Malaysia. And that's probably one reason investors are nervous about the nation's banking stocks: To see why such misgivings may be justified, consider the simple way a bank in Asia can raise short-term dollar resources: borrow locally in the interbank market, use those funds to buy greenbacks in the spot market and then sell them forward by, say, three months.