Malaysia’s crackdown on currency speculators has come at a cost. While it has successfully reduced ringgit volatility, it is threatening to discourage overseas investors.
The central bank’s steps to curb trading in offshore non-deliverable forwards last year made it harder for global funds to hedge their exposure to Malaysia, according to Macquarie Bank Ltd. Global funds cut holdings of Malaysian debt by a combined 25.2 billion ringgit ($5.7 billion) in November and December, the biggest two months of outflows since 2008, central bank data show.
