Malaysia Re-Introducing Capital Controls Not Ruled Out: BofAML

Following the Malaysian ringgit plunging below RM4/USD, concerns that Bank Negara Malaysia may re-introduce capital controls are resurfacing, and the analysts at BofAML argue one can no longer rule out the possibility.

Hak Bin Chua and team at Bank of America Merrill Lynch in their August 13, 2015 research report titled: “Malaysia: the drastic option – capital controls,” however note the current crisis has not reached the extreme stress seen during the Asian financial crisis almost 20 years ago.

Malaysia’s forex reserves dropped below $100 billion

Chua and colleagues point out that Malaysia’s FX reserves have dropped below the $100 billion psychological threshold. The analysts note the MYR has depreciated by 12% against the U.S. dollar since the start of the...