Forex Blog: Currency Trading News & Analysis.

July 8th 2005

Malaysia may renew peg to USD

While many southeast Asian economies explicitly peg their currencies to the USD, it is China that suffers the most scrutiny.  This is natural, as China is by far the largest economy in this region, excluding the Asian ‘Tigers’ and Japan.  A new rumor is circulating that that China and Malaysia, another serial currency pegger, may team up and revalue their currencies at the same time. The Malaysian Ringit was initially pegged to the USD following the Southeast Asian economic crisis, and has been held in place since.  Malaysian officials have hinted that the country may revalue in response to fundamental indicators, which suggest the currency is grossly undervalued.  However, the Malaysian prime Minister insisted while his country and China remain close political allies, no dual currency revaluation agreements are being considered. AFX News Limited reports:

Amid intense speculation about a looming adjustment of the ringgit, Abdullah has said in recent weeks that Malaysia will not adjust its currency peg for the time being but is closely watching developments in the financial markets.

Read More: Malaysia, China not collaborating on currency peg adjustment

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