Malaysia's central bank denies issuing circular barring ringgit orders

Bank Negara Malaysia is denying reports that it has issued a circular prohibiting local banks from taking orders for ringgit transactions from offshore banks at the daily fixing rates.
Bank Negara Malaysia is denying reports that it has issued a circular prohibiting local banks from taking orders for ringgit transactions from offshore banks at the daily fixing rates.PHOTO: BLOOMBERG

KUALA LUMPUR (REUTERS) - Malaysia's central bank on Thursday (Aug 20) denied reports that it had issued a circular prohibiting local banks from taking orders for ringgit transactions from offshore banks at the daily fixing rates, according to a spokesman.

Local newspaper The Sun reported earlier on Thursday that the central bank, Bank Negara Malaysia, had issued the ban after the ringgit plunged to 4.10 to the US dollar last Friday. Foreign exchange reserves also dropped to below the US$100 billion (S$140 billion) threshold in July.

"There is no such thing," a Bank Negara Malaysia spokesman said when contacted by phone.

The ringgit is the worst performing emerging Asian currency this year, and has fallen to pre-peg 17-year lows. It was trading at 4.1130 to the US dollar and 2.9334 to the Singapore dollar as at 10.50am on Thursday.

Analysts say one reason is reduced confidence in Malaysia as indebted state fund 1Malaysia Development Bhd is being probed for financial mismanagement, triggering a political crisis for Prime Minister Najib Razak.