Bank Negara Malaysia governor Tan Sri Zeti Akhtar Aziz says the ringgit is expected to recover once issues surrounding 1Malaysia Development Berhad (1MDB) are resolved. – The Malaysian Insider pic by Seth Akmal, September 21, 2015.Bank Negara Malaysia (BNM) governor Tan Sri Zeti Akhtar Aziz said today that the ringgit – Asia's worst performing currency of the year so far – is expected to start recovering once issues surrounding troubled state fund 1Malaysia Development Bhd (1MDB) are resolved.
1MDB has been the subject of multiple investigations, amid allegations of financial mismanagement and graft.
Prime Minister Datuk Seri Najib Razak, who also chairs the fund's advisory board, has resisted calls for him to step down from government, but controversies continue to rage. 1MDB is seeking to reduce its $11 billion debt by selling power and property assets.
"They (the ongoing investigations) are going to yield an outcome," Bank Negara Malaysia (BNM) chief Zeti said at an event in the capital city organised by government think tank Pemandu.
Besides a resolution of domestic issues, Zeti said other factors which could prompt a recovery in the ringgit included an eventual decision by the US Federal Reserve to raise interest rates, a recovery in global commodity and energy prices and an improvement in China's economy.
The ringgit came under further pressure today after The Wall Street Journal reported that the US Federal Bureau of Investigation (FBI) launched an investigation into allegations of money-laundering at 1MDB.
It slid 1.3% to 4.26 per dollar as of 3.25pm (Malaysian time) from the previous close of 4.2070. It has now lost nearly 18% of its value against the dollar so far this year. – Reuters
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