BNM released some RM15.5bn of liquidity into the economy during the first half of the year. An influx of foreign funds into the economy in July saw a reversal of this as BNM had to absorb some RM1.2bn in excess liquidity. Against the background of falling demand there is little by way of inflationary pressures in the economy at present. The ringgit peg came under sustained pressure in May and June as concern grew that the countries real effective exchange rate was worsening and was having an impact upon Malaysia's exports. As a result of this sentiment capital outflows picked-up and reserves started to fall.
Most commentators see the ringgit out of the woods for the time being.
But it still remains vulnerable in the medium term, particularly to any reaction to a fall in regional currencies. This is largely due to import compression as electronic manufacturers cut down on their import of components and, to a lesser extent, lower consumer spending. Corporate Restructuring 10. With debts of over RM32bn this conglomerate is one of the largest debtors to the banking sector as well as being almost a byword for poor corporate governance and government connections. Most analysts are taking the government's resolve to restructure Renong-UEM seriously.