Too late is a 2006, hit for JOJO, as Bank Negara Malaysia' s "INTERVENTION' looks like becoming an outright disaster.
This is what SCOTIABANK has got to say :
Investors grew more concerned over BNM tightening trading rules, said Mr Qi Gao, an FX strategist with Scotiabank in Singapore, referring to Bank Negara Malaysia.
The ringgit could weaken past 4.40 per dollar and head to 4.50 by the end of the year, he added.
If that is not enough, this is what the folks at AsiaOne in Singapore has to say :
"There has been a global hunt for yield in the last six to nine months, which meant a lot of money was going into the emerging markets," said Bank of Singapore currency strategist Sim Moh Siong.
"But there is now a reversal of this heavy foreign positioning." Mr Sim said the ringgit's dismal performance was likely due to "fear of capital controls".
This follows news that Malaysia's central bank is asking foreign banks for a written commitment to refrain from trading the ringgit in the offshore non-deliverable forwards market as it moves to protect the weakening currency.
Bank Negara Malaysia (BNM) yesterday confirmed it is intervening in markets to support the ringgit.
Mr Julian Wee, senior markets strategist for Asia at the National Australia Bank, said the ringgit's sustained weakness could be due to less effective intervention than regional counterparts.
He added: "The fundamentals are pointing in that direction (of further weakness in the ringgit) and there is not much the BNM can do to reverse that at this juncture." The fall in oil prices would have had a significant impact on the ringgit as well, said Mr Wee, given that much of Malaysia's economy is dependent on the oil and gas industry. The nation is a major oil exporter.
