Ringgit To Remain Weak As Ringgit Forex Reserves Drop

ringgit forex reserves drop

The Malaysian currency is expected to remain weak due to potential outflow of foreign capital due to the volatility caused by the Eurozone crisis, said RHB Research Institute today.

The research house said that the ringgit depreciated by 4.6 per cent against the US dollar in May as compared with a gain of 1.1 per cent in April in line with a drop in foreign exchange reserves as investors turned risk averse and reduced their exposure to Asian assets.

Malaysiaโ€™s foreign exchange reserves declined by US$0.1 billion or RM0.3 billion in the second half of May to US$136 billion (RM417 billion), after growing by US$0.2 billion or RM0.6 billion in the first half of May.

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Japan And China To Launch Direct Currency Trading

Direct Currency Trading

Japan and China said on Tuesday they will start direct currency trading this week, marking the first time Beijing has let a major unit other than the dollar swap with the yuan.

The move, which will scrap the US currency as an intermediary unit, comes as China introduces measures as part of a long-term goal to internationalize its currency and rival the dollar as the world’s benchmark.

The yuan-yen trade — part of a wider deal reached last year between Beijing and Tokyo to forge closer ties — will also be allowed to move in a wider range than the narrow band at which the dollar and yuan change hands, Dow Jones Newswires and the Nikkei business daily reported.

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