Is the massive American hit for the X Ambassadors this year.
America's Wall Street Journal feels the Ringgit is unsteady and it has got a lot to do with Bank Negara Malaysia.
Bank Negara Malaysia may have opened a Pandora's box, the Wall Street Journal seems to suggest .
At least , that's my view after reading the article. You might have a different TAKE. So do read BELOW:
Malaysia’s efforts to clamp down on currency speculators in recent days are rattling investors and raising the specter of capital controls last seen during the Asian financial crisis nearly two decades ago.
The Malaysian ringgit sank and government bonds sold off after the country’s central bank last week said it had requested that foreign banks operating there refrain from speculating on the currency in offshore markets, which it said were unduly influencing the ringgit’s value.
The ringgit is down 5.4% month-to-date, the second-biggest decliner among Asian currencies behind the Japanese yen. The yield on the country’s benchmark government 10-year bond, meanwhile, has risen to 4.350%, up from 3.621% at the start of November. Bond yields rise when prices fall.
The Malaysian authorities’ attempt to curb the ringgit’s fall is the latest example of the pressure being placed on central banks in emerging countries followingDonald Trump ’s surprise U.S. election victory.
Mr. Trump’s win has raised expectations the U.S. will pursue inflationary policies that will force the Federal Reserve to raise interest rates more quickly than previously expected. In turn, that has led the dollar to strengthen against most global currencies, while the rising yield on U.S. Treasurys has increased their attractiveness for investors relative to bonds issued by developing nations.
“The ringgit has been one of the main casualties from the rising yields in the U.S.,” said Sean Callow, a senior foreign exchange strategist at Westpac BankingCorp. in Sydney.
Besides its move to tame speculation, Bank Negara Malaysia, the Malaysian central bank, has confirmed that it intervened in currency markets in the past week to defend the ringgit.
Some market participants say its actions could be counterproductive if they persuade investors to flee Malaysian assets. Foreigners own a little more than half of Malaysia’s government bond market, according to data fromHSBC .
