First News
Volume:7, Number:49
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Business & Finance 4

Malaysia Slowly Winning Battle Against Forex Speculators

Foreign portfolio investors say they are coming back to Malaysia's markets, six months after many of them revolted against the central bank's crackdown on the offshore ringgit trading market. Foreigners, who had held about half of the outstanding Malaysian government bonds, fled the market between November 2016 and March this year after Bank Negara Malaysia said they could no longer trade in ringgit non-deliverable forwards (NDFs). These are offshore contracts used to hedge exposure to the ringgit. Bank Negara maintained its ban on ringgit trading in the NDF market, which it considers opaque, volatile and subject to abuse, even as it bled foreign exchange reserves defending the falling currency and as bond yields rose. Foreigners withdrew at least USD14 billion from Malaysia's bond markets between November and March. By April, however, about 10 percent of that money had come back into Malaysian government and central bank bonds. The data for May is expected to show even more foreign outflows have returned.

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