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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Stitch who wrote (6324)	9/10/1998 9:33:00 AM
From: Worswick	Read Replies (1) \| Respond to of 9980

Does this mean if we legalize drugs the world will pick up $400 billion to spend on something else? How are you this PM my boy? I just keep enjoying your posts from the battle zone. For Private Use Only (C) The Financial Times THURSDAY SEPTEMBER 10 1998 Banks snub Malaysian currency tactics By Sheila McNulty in Kuala Lumpur International banks yesterday snubbed Malaysia's last-minute decision to extend yesterday's deadline for them to settle outstanding ringgit contracts, and shut the door firmly on further financial dealings with the country. Late on Tuesday night the Malaysian central bank suddenly reversed last week's decision that contracts in its currency had to be settled by yesterday, saying: "All outstanding contracts entered into prior to 1300 hours on September 1, 1998 can be settled on their respective maturity dates." But currency dealers said investors were angry at Malaysia for abruptly withdrawing the ringgit from international financial markets to "trap" them into settling outstanding positions at the new official rate of M$3.80 to the US dollar. "People worked around the clock to meet it [yesterday's deadline]. Chits have been torn up. You can't just uncancel it," said Patricia Lui, foreign exchange analyst at Technical Data Thomson Asia, in Singapore, the ringgit's largest offshore market. The international banks had agreed among themselves to settle the M$25bn (US$6.6bn) in outstanding contracts by "netting off" obligations and converting the difference into US dollars. Analysts suspect Malaysia hoped with its 11th-hour change of heart to undermine the international banks' agreement to settle at M$4.00, the ringgit trading rate when Malaysia announced sweeping currency controls. When Malaysia imposed controls last week, it counted on repatriation of those funds by yesterday's deadline to shore up a liquidity shortage in its overextended banking system. Bankers said Malaysia would have difficulty convincing international banks to do any business with it, particularly at M$3.80 when, given the political and economic uncertainty created over the past week, the ringgit would probably be trading closer to M$5 to the US dollar, or even M$6. "People have no interest in sitting around in this currency," said a dealer in Singapore. "People are just happy to walk out of Malaysia and never deal with them again." () The Financial Times