The ringgit slid to 3.9000 as of 0830 GMT, its weakest since Sept. 2 1998, a day before the government pegged was pegged at 3.8000. — File pic

KUALA LUMPUR, Aug 6 — The Malaysian ringgit weakened past 3.9000 per dollar today for the first time since the Asian financial crisis 17 years ago as concern grew over a corruption scandal embroiling the prime minister and weakness in commodity prices.

The ringgit slid 0.7 per cent to 3.9040 per dollar as of 0830 GMT.

It was the weakest level since Sept. 2, 1998, the day before the government pegged it at 3.8000 per dollar, putting a floor under the currency to defend it against the ravages of the crisis whipping round the region.

Malaysia took the ringgit off the peg in 2005.

Kuala Lumpur stocks lost 1.8 per cent today, underperforming most other Asian equities.

Most government bond prices fell. The five-year bond yield jumped to 3.720 per cent, its highest since Feb. 23. The 10-year yield rose to 4.113 per cent, the highest since June 17.

Investors have been losing confidence in the country's assets as pressure grows on Prime Minister Najib Razak amid graft allegations involving the indebted 1MDB state fund.

It is unclear how heavily the central bank can intervene to defend the worst-performing Asian currency this year, given a sharp drop in foreign exchange reserves.

Sentiment is also negative because weak commodity prices and a slowing Chinese economy may hurt Malaysia's exports and government finances.

Malaysian factory activity continued to shrink in July, a private survey showed on Monday. — Reuters