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Malaysia's central bank says global, domestic factors drive ringgit's volatility
[KUALA LUMPUR] Malaysia's central bank said on Thursday the current movements of the country's ringgit currency are affected by both global and domestic developments, after it slid to nine-year lows this month.
"Global developments would include the investor expectations relating to monetary policies of major central banks and the trends in crude oil and gas prices," it said in a statement.
"Domestic factors include concerns about government linked entities and ratings related issues," it added.
Weak prices for commodities, a key export for Malaysia, have hurt market sentiment and the ringgit. Concerns for state fund 1MDB, which has been dogged by controversy over debt of nearly RM42 billion and alleged financial mismanagement, have also weighed on the currency and Malaysia's credit rating.
The central bank said on June 3 it had launched a formal enquiry into 1MDB, whose board of advisors is chaired by Prime Minister Najib Razak.
"The central bank has never been and will not be drawn into any political agenda but will remain accountable for delivering its mandates to the people of this country," it said.
The ringgit was up 1.2 per cent at 3.71 against the dollar, recovering slightly from 3.77 on June 8, which was its lowest level since February 2006. It slumped to 3.80 during the 1998 Asian financial crisis.