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Malaysia's central bank must hold its nerve

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Zeti Akhtar Aziz, Malaysia’s central bank governor, is standing firm against capital controls or pegging the ringgit.   © Reuters

What began as a steady decline last September has turned into a rout.

     The Malaysian ringgit has lost 16% of its value against the dollar since mid-May, on par with the decline in the Brazilian real, one of the most vulnerable emerging market currencies. The ringgit's fall exceeds that of the Turkish lira, another acutely vulnerable currency. Furthermore, the ringgit has become the focus of investor nervousness in emerging Asia's battered foreign exchange markets since the shock devaluation of the renminbi earlier this month.

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