Ringgit hits new lows against Singdollar
THE Malaysian ringgit continued its freefall after foreign exchange markets opened yesterday, sinking to new lows below 3.05 to the Singapore dollar.
At 8:25 am, the ringgit was trading at 3.0549 to the Singdollar, significantly lower than its close of 3.0154 on Tuesday, reported The Straits Times.
The currency pared some of its losses to trade at 3.0470 at 8:37 am.
The ringgit crossed the psychologically key level of 3.00 against the Singdollar on Monday, a day when investors fled global bourses as well as emerging currency and commodity markets on deepening fears over China's slowing economy.
The currency also slumped to 4.25, below a 17-year low, against the US dollar yesterday.
The ringgit has weakened more than 18 per cent this year.
Meanwhile, there is speculation that a report by Singapore's Business Times might have contributed to the ringgit's further rout yesterday.
According to the report, citing an unidentified person, Abu Dhabi's International Petroleum Investment Company (Ipic) and its subsidiary Aabar Investments may pull out of a plan agreed in June to help restructure 1Malaysia Development Berhad's (1MDB's) US$3.5 billion (S$5 billion) of debt.
Allegations have dogged 1MDB, Malaysia's state investment arm, since last month that almost US$700 million have moved through state agencies and companies linked to it into Prime Minister Najib Razak's personal accounts.
"That (Ipic withdrawal) could make it difficult for 1MDB to resolve its debt, which will weigh on the country's risk," Bloomberg quoted Nizam Idris, Singapore-based head of foreign-exchange and fixed- income strategy at Macquarie Bank, as saying.
1MDB yesterday denied that its restructuring deal with Ipic was off, insisting that they remained "engaged in discussions", the Malaysian Insider reported.
The plan would help slash 1MDB's burgeoning debts by RM16 billion (S$5.3 billion), said the news website.