Ringgit at 16-year low on political woes, Greece dampens outlook

-A +A

SINGAPORE (July 6): The Malaysian ringgit hit a 16-year low on Monday after reports linked the country's prime minister to probes into alleged corruption, while most emerging Asian currencies slid as Greeks rejected austerity measures for bailout money.

The ringgit fell as much as 0.8 percent to 3.8070 per dollar, its weakest since May 1999.

Two of Malaysia's main opposition parties on Sunday demanded an emergency sitting of parliament to discuss Prime Minister Najib Razak's future after a media report linked him to investigations involving state fund 1MDB.

A Wall Street Journal report published on Friday said investigators had traced nearly $700 million to bank accounts they believed belonged to the prime minister.

Najib has denied taking any money from the debt-laden state fund or any other entity for personal gain.

"The report supports our conjecture that an increase in political risk has undermined confidence that sovereign support would be forthcoming if needed for 1MDB," said Tim Condon, head of research Asia for ING in a client note.

Most other emerging Asian currencies fell as Greeks voted against conditions of a rescue package from creditors on Sunday, increasing doubts over the future of the country's euro zone
membership and denting risk appetite.

The South Korean won slid to 1,128.0 per dollar, its weakest since March 18.