• The Malaysian Ringgit declined sharply in the past month as the 1MDB scandal intensified and Malaysia’s prime minister responded by reshuffling his cabinet.
• Investor confidence in Malaysia has been eroded; the Ringgit is the worst performing Asian currency over the past 12 months.
• Weak oil prices also increased fears of higher fiscal deficit for 2015 and concerns over Malaysia’s rising external debt
• Institutional investors are fleeing the Ringgit due to low Malaysian central bank reserves and fears of capital control being implemented like in 1998 during the Asian Financial Crisis

The recent sharp decline of the Malaysian Ringgit (MYR) caught the attention of many Singaporeans especially after it fell below RM3 against the Singapore dollar (SGD) on 24 August 2015. It eventually reached a record low of 3.04 to 1 SGD.

Chart: XE.com

The MYR has gradually declined over 20% against the SGD over the last year but ......