Ringgit Rally To Prove Short-Lived

September 2008 | Market Strategy

Malaysia's new Finance Minister Najib Razak has doused the flames of speculation surrounding a move to re-peg the country's ringgit currency to the dollar, categorically stating that the authorities 'have no intention to re-peg the ringgit now or in the future'. Speculation that the ringgit may soon be revalued by as much as 10% - as suggested by former premier Mahathir Mohamad on 21 September in order to deal with the effects of the US-induced financial crisis - saw traders and speculators rush to cover short positions on September 22, pushing the unit to a two-week high. However, after Najib and central bank governor Zeti Akhtar Aziz both issued statements denying the rumours, it appears that an extended rally for the beleaguered currency seems unlikely.

If you would like to subscribe to Emerging Markets Monitor and gain instant access to this article, please click here to subscribe.

If you would like to take a trial to Emerging Markets Monitor please click on the trial link below.