Sep 23, 2015

    1MDB: Don't blame us for ringgit's falling value


    MALAYSIA'S state investor 1Malaysia Development Berhad (1MDB) has expressed disappointment with the central bank governor who singled out the strategic development company for the ringgit's weakness.

    1MDB said the weakness of the ringgit and other currencies is due to the abrupt fall in oil prices, expectation of rising United States interest rates and global economic slowdown in emerging markets.

    "Historically, never once has one company been linked in such a way to the value of the ringgit. We trust that the facts shared by 1MDB and the immediate clarifications issued to date, will provide clarity and assurance to all concerned parties," 1MDB said in a statement yesterday.

    It highlighted that the value of its assets exceeds its debt and it has consistently met, with no default, its interest service and principal repayment obligations to both foreign and domestic lenders.

    Bank Negara Malaysia Governor Zeti Akhtar Aziz said on Monday that a US rate hike, recovery in commodity prices and stronger Chinese growth, together with the resolution of domestic political issues will help to stabilise the ringgit.

    "We don't need any scandals, when we resolve all the scandals revolving around 1MDB, then we'll see the ringgit start to recover and stabilise," she said at a forum organised by the Performance Management and Delivery Unit (Pemandu).

    She added that the markets were looking forward to the US rate hike but the window of opportunity has closed for now.

    Since the beginning of the year to Sept 18, the ringgit has weakened by 16.5 per cent to the US dollar, according to data provided by Pemandu.

    The ringgit was trading at 3.0372 per Singapore dollar as of 12.21pm yesterday, weakening from Monday's close of 3.0277.