Ringgit ‘can recover once 1MDB issue resolved’

“The US Federal Reserve have had zero-bound interest rates for seven years now, and everyone is looking for the timing for the exit, and this contributes to the strengthening of the USA dollar”.

– AFP pic, September 24, 2015.Datuk Seri Shafie Apdal, who was dropped from Cabinet two months ago, has urged Putrajaya to accept the advice of Bank Negara governor Tan Sri Zeti Akhtar Aziz and settle the 1Malaysia Development Bhd (1MDB) issue so that investor confidence in the country can be restored.

Aziz, globally known as the guarantor of Malaysia’s financial stability, said the ongoing 1MDB controversies were also impacting the Ringgit, since they have hit the image of the currency.

“Historically, never once has a company been linked in such a way to the value of the ringgit”.

“1MDB is disappointed that Tan Sri Zeti appears to single out 1MDB for the current weakness of the Ringgit”. A subsequent investigation by the Malaysian Anti-Corruption Commission revealed about $700 million that found its way into Najib’s bank accounts was from political donations and not related to 1MDB – the accounts were closed in 2013.

1MDB, whose advisory board is chaired by PM Najib, came under the spotlight past year due to its rising debt, drawing criticism from opposition law makers and calls for him to step down.The value of the firm’s assets exceeds its debt, according to an e-mailed statement from the company today.

She said BNM’s investigation into possible contraventions on approvals granted to 1MDB has been completed and the findings have been submitted to the Attorney General’s Chambers.

“But they want to see further enforcement”, she said.

“The Fed said that it would wait because of concerns of external risks and it made the market think harder about the global growth environment”, said Sim Moh Siong, a currency strategist at Bank of Singapore Ltd. “Because of the uncertainty as to the Fed’s future response and the possibility it may be behind the curve, the equity market sold off and generally risk- off is negative for emerging-market currencies”.

Zeti said worldwide regulators such as the Financial Action Task Force is focusing on money laundering that may be connected to financing terror. “There is no place in this planet that anyone can hide in because the world has come together to track down any irregular activities”.