KUALA LUMPUR: Malaysia will maintain its 10-year ban on offshore trading of the ringgit to prevent a repeat of the currency crisis in 1997/1998, a senior minister said yesterday.

“They (offshore currency traders) will not be allowed to borrow in ringgit,” Tan Sri Nor Mohamed Yakcop, second finance minister told lawmakers in parliament.

Analysts said the decision would ensure the ringgit remained stable amid the current uncertainties in the global economy, along with the weakening of the US dollar and rising fuel prices.

Last October, the central bank said Malaysia could scrap its remaining capital controls, introduced during the 1997 financial crisis.

Bank Negara governor Tan Sri Dr Zeti Akhtar Aziz has said the move would allow offshore trading of the ringgit and was designed to attract investment in Malaysia.

Malaysia banned offshore trading of the ringgit and pegged the currency at 3.80 to the US dollar in 1998 to restrict currency speculation during the financial crisis which ravaged East Asian economies.

The peg was removed in July 2005 and the currency has appreciated steadily since then, to current levels of 3.18 to the greenback.

??? AFP