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Malaysia's ringgit crackdown deterring overseas investors

Kuala Lumpur

MALAYSIA'S crackdown on currency speculators has come at a cost. While it successfully reduced ringgit volatility, it is threatening to discourage overseas investors.

The central bank's steps to curb trading in offshore non-deliverable forwards last year has made it harder for global funds to hedge their exposure to Malaysia,according to Macquarie Bank Ltd.

Global funds cut holdings of Malaysian debt by a combined 25.2 billion ringgit (S$8.05 billion) in November and December, the biggest two-month outflow since 2008, central bank data show.

The difference between onshore and forward prices for the ringgit jumped to a record in November, spurring the central bank to crack down on NDF...

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