The ringgit – the region’s worst performing currency – has lost almost 15% in value against the dollar since June and Malaysia’s foreign reserves plunged to US$105 billion at the end of March, a US$25 billion drop from a year ago.
Putrajaya had reportedly appointed HSBC Holdings, CIMB Group and Standard Chartered to arrange the sovereign sale, which might be finalised as soon as this week, the business news portal quoted sources as saying.
Malaysia has been hit by a slump in global crude prices, which forced Putrajaya to revise its Budget 2015 deficit target, and fallout from state-owned strategic investor 1Malaysia Development Berhad (1MDB)’s RM42 billion debts.
The ringgit is trading at its lowest since 2006. Last month, Petronas issued a record US$5 billion of sukuk and conventional debt in dollars.
Bloomberg reported that Malaysia’s foreign currency holdings fell 9.4% in 2015, the steepest first-quarter loss since the 1997 Asian financial crisis.
Bank Negara has also reportedly been defending the ringgit while ratings agency Fitch Ratings Ltd said it would cut the nation’s debt ranking and 1MDB.
Prime Minister and Finance Minister Datuk Seri Najib Razak is facing the toughest challenge in his political career, with attacks led by former prime minister Tun Dr Mahathir Mohamad.
The country’s longest-serving prime minister said Najib should step down over his failure to deal with the 1MDB issue, questioning the need for Putrajaya to give it a standby credit facility of almost RM1billion, the fund's purchase of government land and its dubious deal with little-known oil company, PetroSaudi International.
The goods and services tax (GST) which came into force on April 1 is also deeply unpopular.
The Malaysian economy grew 6% last year and is expected to slow down to 4.7% in 2015 while the current account will remain in a small surplus.
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