MALAYSIAN RINGGIT FALLS AS DEFICIT TARGET MAY BE OUT OF REACH
KUALA LUMPUR, Malaysaia - The ringgit declined the most in a
week after Fitch Ratings said the government may miss its 2016 fiscal deficit
target as the economy remains under pressure from lower commodity prices.
The shortfall could exceed Prime Minister Datuk Seri Najib
Razak’s estimate of 3.1% of gross domestic product (GDP), the ratings company
said in a statement today.
Fitch estimates the slippage is unlikely to increase
Malaysia’s debt ratio, which will remain around 52% of GDP until 2017.
- In Friday’s budget, Najib unveiled plans to raise taxes for high-income earners and accelerate infrastructure development while lowering the deficit from 3.2% in 2015.
- “Fitch didn’t help,” said Vishnu Varathan, a Singapore-based economist at Mizuho Bank Ltd.
- “The worry is that with oil prices looking as soggy as they are and economic headwinds persisting, hopes for uninterrupted fiscal consolidation may be a little overdone.”
- The currency depreciated 0.9%, the most since October 20, to 4.2670 a dollar in Kuala Lumpur, according to prices from local banks compiled by Bloomberg.
- While the ringgit has gained 3.2% this month on fading bets for a US interest-rate increase in 2015, it is still the worst performer in Asia this year as a slump in Brent crude cuts the oil exporting nation’s revenue.
- The Bloomberg Commodity Index of 22 raw materials from oil to metals fell for a fifth day, headed for the longest stretch of declines in two months.
Fitch raised the outlook on Malaysia’s A- rating, the
fourth-lowest investment grade, in June after earlier warning of a downgrade
due to a deterioration in the nation’s finances.
Sovereign bonds rose, with the 10-year yield falling two
basis points to 4.1%, the lowest since August 5, according to prices from Bursa
Malaysia.
Source: – Bloomberg
MALAYSIA RINGGIT HITS 16-YEAR LOW ON PM’S ALLEGED LINKS TO GRAFT
SINGAPORE - Malaysia's ringgit hit a 16-year low on Monday
as political tensions mounted over a report that linked Prime Minister Najib
Razak to probes into alleged corruption involving state fund 1MDB.
The ringgit fell as much as 0.8 percent to 3.8070 per dollar,
its weakest since May 1999.
Two of Malaysia's main opposition parties on Sunday demanded
an emergency sitting of parliament to discuss Najib's future.
A Wall Street Journal (WSJ) report published on Friday said
investigators had traced nearly US$700 million to bank accounts they believed belonged
to the prime minister.
Najib has denied taking any money from the debt-laden state
fund or any other entity for personal gain.
Source: AsiaOne
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