Dwindling Sukuk gets ringgit boost thanks to the Islamic Development Bank (IDB), but the local currency is on a slide with the shadow of 1MDB looming.
The IDB plans to sell local currency Islamic bonds (sukuk) in the Malaysian market this year after a three-year hiatus, the head of the Jeddah-based multilateral lender told Reuters.
The deal would be the fourth ringgit-denominated sukuk from the AAA-rated IDB, one of the largest issuers of sukuk alongside the governments of Malaysia, Indonesia and Qatar.
However, Malaysia’s ringgit fell to its weakest in more than five weeks, bent by a stronger US dollar, and also due to negative sentiments following 1MDB.
The ringgit lost as much as 0.6 percent to 4.0100 per dollar, its weakest since March 29, tracking its weakness in overnight non-deliverable forwards (NDFs) markets.
Most of Malaysia’s government bond prices also fell.
This has been a bad week for Malaysia, despite the dissolution of the 1MDB advisory board, while the Ministry of finance accepted the resignation of the 1MDB board of members.
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