Reuters report on the RM yesterday :
http://www.reuters.com/article/malaysia-fx-controls-idUSL4N1DP21T?feedType=RSS&feedName=marketsNews
RM plunged nearly 7% over the last two weeks, the worst performing currency in Asia.
Last week, BNM's attempts to force currency traders overseas to stop selling down the RM has had little discernible impact so far.
Many fear a high possibility the government may slap capital controls.
Foreign investors are fleeing from Malaysia's bond market and MY is especially vulnerable to any large outflows.
BNM has less ammunition to defend the RM. Foreign currency reserves now stood at $98.3 billion, about a third below the record $141.4 billion reached in 2013.
MY is treating the symptoms and not the underlying cause of the problem, which is worsening economic fundamentals.
Conclusion : Let the RM continue to slide, intervene to defend the currency, raise interest rates or even impose capital controls like during the 1997/98 Asian financial crisis.
But, are there any other options?
Maybe China can come over and buy over all the stocks and bonds sold by the other foreign investors?
