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Malaysians take to the streets over 1MDB scandal

KUALA LUMPUR -- Thousands defied authorities' orders and gathered here on Saturday, calling for the resignation of Prime Minister Najib Razak over a multi-billion-dollar scandal.

Anger is also swelling due to the rising cost of living, which many blame on government austerity measures.

Crowds from all walks of a complex, multiethnic society made their way to the Dataran Merdeka independence square and Petronas Twin Towers despite massive roadblocks erected by the police overnight. Clad in yellow T-shirts, some chanted, "Bersih!" The word means "clean" in Malaysian and is also the name of the rally organizer.

Others casually walked along.

Malaysian police detained 14 activists ahead of the rally.

Saturday's demonstration was the second in two years calling for Najib's ouster. The first failed in that goal despite former Prime Minister Mahathir Mohamad's surprise appearance.

Mahathir joined the crowds again this time. "This country is governed by thieves," he told the rally in front of the iconic Twin Towers. "Najib is not fit to be the prime minister."

Bersih has made five demands -- including that fair elections be held and that the freedom to protest be granted -- on top of calling for Najib's ouster and for independent auditors be allowed to investigate 1Malaysia Development Bhd, a government-run strategic investment company.

Najib has been embroiled in the scandal that has engulfed 1MDB. Entities related to the fund have been investigated by several foreign governments for alleged money laundering and other offenses. Both 1MDB and Najib, the fund's founding architect, have repeatedly denied any wrongdoing.

So far, Singapore has jailed a former banker with Swiss private lender BSI Bank for forging documents that allowed the transfer of funds linked to 1MDB. Singaporean and Swiss authorities, meanwhile, have fined BSI Bank and ordered it to shut down.

In the U.S., the Department of Justice has filed asset forfeiture orders in an attempt to recover over $1 billion worth of assets believed to have been bought with money stolen from 1MDB. The DOJ has named Riza Aziz, Najib's stepson, and "Malaysian Official 1," which has been taken to mean the prime minister, in its probe.

But Malaysian authorities have cleared 1MDB, which was established to invest in the strategic sectors of power generation and real estate development.

"It was I who first instructed multiple authorities in Malaysia to conduct investigations," Najib said recently in a written interview with the Nikkei Asian Review.

Many are not convinced. Bersih said "endemic corruption" in the country has contributed to lower standards of living.

"Things are getting pricier," Facebook user Zul Fazli recently responded to a Najib post on the prime minister's Facebook page. In the post, Najib portrayed Bersih as a puppet of the opposition coalition.

Malaysia has drastically curbed subsidies since the price of crude oil began spiraling downward in the second half of 2014.

The country's economy in the July-September quarter grew 4.3% from a year earlier, an improvement from the two previous quarters. Still, Malaysia's central bank issued a warning that the external environment remains a threat to growth prospects.

The ringgit has been the worst performing Southeast Asian currency this year. Since Nov. 8, it has plunged some 5%. On Friday, it was at 4.41 against the U.S. dollar, close to its historic low of around 4.80, reached during the Asian financial crisis of almost 20 years ago.

Bank Negara, the country's central bank, on Friday admitted to intervening in the currency market to stabilize the ringgit, which has been weakening on the prospect of an interest rate hike in the U.S. now that Donald Trump's election victory has buoyed American markets.

The ringgit is atrophying even more in offshore trading. The non-deliverable forward futures market tends to quote weaker ringgit prices than onshore spot rates.

Bank Negara has directed foreign banks in Malaysia to refrain from any NDF transactions that might be deemed illegal.

Market analysts say Malaysia may be running out of options to arrest the currency's slide.

"Further intervention is likely if the ringgit continues to come under pressure," Capital Economics wrote in a note on Friday, "but with foreign exchange reserves now just 80% of the IMF's recommended level, the central bank may soon have to consider other alternatives."

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