KUALA LUMPUR: Malaysia’s ringgit hit a 16-year low Monday on growing political uncertainty following allegations that a probe into a state investment fund found hundreds of millions of dollars were transferred into the prime minister’s personal accounts.

The currency fell 0.8pc to 3.8088 against the dollar in Kuala Lumpur, the lowest level since May 1999. It was fixed at 3.8 to the dollar in 1998 during the Asian financial crisis after it slumped 35pc the previous year. The peg was dropped in 2005.

Malaysian stocks dropped 1.3pc, in line with regional markets that have been roiled by the Greek saga.

The Wall Street Journal reported on Friday that government investigators had uncovered nearly $700m that moved through government agencies, banks and companies linked to state-controlled investment fund 1Malaysia Development Bhd (1MDB).

It said the funds ended up in the accounts of premier Najib Razak, who chairs the advisory board of 1MDB which he launched in 2009.

Malaysia’s attorney general said Saturday that a task force would investigate the allegation, which Najib has dismissed as “political sabotage”. 1MDB has said it had never provided any funds to Najib, and the premier has in the past persistently denied any wrongdoing.

Both Najib and 1MDB have also said that previous leaked documents had “reportedly” been tampered with, and that the documents cited by the WSJ had not been verified.—AFP

Published in Dawn, July 7th, 2015

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