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Ringgit Weakens Past 4.00 To US Dollar, Lowest Since 1998

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KUALA LUMPUR: The ringgit weakened past the crucial 4.0000 level in late morning trade against the US dollar, in tandem with the weak Asian currencies with China’s yuan hitting a four-year low after Beijing devalued the currency.

At 11.03am, the ringgit was at 4.0060 to the greenback, the weakest since the Asian financial crisis in 1998.

The weakening ringgit also impacted the equities market, sending the 30-stock FBM KLCI further lower. The local equities market had been impacted by the heavy foreign selling.

The KLCI fell 21.19 points or 1.29% to 1,615.52. Turnover was 859.24 million shares valued at RM518.25mil. There were 753 losers to 83 gainers while 174 counters were unchanged.

Reuters reported China’s yuan hit a four-year low on Wednesday, slipping further a day after authorities devalued the yuan in a move that sparked fears of a global currency war and raised concerns that Beijing was looking to support its struggling exporters.

Spot yuan fell to 6.43 per dollar, its weakest point since August 2011, after the central bank set its daily midpoint reference even weaker than Tuesday’s devaluation. The currency fared worse in offshore trade, touching 6.57.

The central bank, which had described the devaluation as a one-off step to make the yuan more responsive to market forces, sought to reassure financial markets on Wednesday that it was not embarking on a steady depreciation.

Reuters reported the South Korean won fell sharply to its weakest in more than four years against the dollar while stocks slid to a near six-month low after China’s central bank weakened the yuan’s official mid-point for a second day.

The South Korean won was down 1% at 1,190.7 on the dollar. The won slid as much as 1.1% to 1,192.8, its lowest since June 5, 2011. Local traders suspected dollar-selling smoothing operations by foreign exchange authorities to curb the won’s sharp fall.

The Australian and New Zealand dollars dropped to six-year lows on Wednesday after China allowed its yuan to fall further following a shock devaluation in the prior session.

The Australian dollar crumbled as far as $0.7217, its lowest since 2009, after stops below $0.7225 were triggered. It recouped some losses to $0.7250, but was still 0.7 percent down for the day.

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