Daily round-up, Sep 26: Pound hits record low; Malaysia central bank announces new measures to combat scams; HK prepares for surge in travel after lifting quarantine
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The pound slumped to a record low against the dollar on Monday (Sep 26), prompting speculation of an emergency response from the Bank of England.
Concerns that high interest rates could hurt growth also knocked Asian shares to a two-year low, with stocks such as Australia's miners and carmakers in Japan and Korea hit hard.
The pound plunged nearly 5 per cent at one point to break beneath 1985 lows and hit US$1.0327. Moves were exacerbated by thinner liquidity in the Asia session, but even after stumbling back to US$1.05, the currency is still down about 7 per cent in just two sessions.
Against the Singapore dollar, the pound sank 2.7 per cent in early trade to S$1.5111 as of 11.30am on Monday.
The collapse in sterling came as markets across the world were sent into a spin by recession worries caused by a sharp tightening of monetary policy by central banks fighting decades-high inflation.
Analysts from Japanese bank Nomura predicted further pain for the sterling, and expect it to reach parity versus the dollar by end-November and then keep on falling.
Malaysia's central bank has announced a slew of additional measures and security features to curb the rising number of financial scams.
The measures include requiring banks to migrate from SMS one-time passwords to "more secure forms of authentication" for online activities and transactions as well as a cooling-off period for first-time online banking service registrations.
Bank Negara Malaysia (BNM) governor Nor Shamsiah Mohd acknowledged the new measures would inevitably lead to friction or inconvenience for customers, but stressed that they were necessary.
In 2019, a total of 13,703 scam cases were reported, with losses of RM539 million (US$117 million), and in 2020, this rose to 17,227 cases with RM511.2 million in losses.
Hong Kong is readying for a surge in travel, with travel companies reporting 10-fold jumps in requests.
Mandatory COVID-19 hotel quarantine for international arrivals was lifted on Monday for the first time in more than two-and-a-half years. Such arrivals could return home or seek accommodation of their choice, but had to self-monitor for three days on entry.
Hong Kong's Travel Industry Council expects outbound travel to surge as much as 50 per cent for the next few months.
International aviation body IATA said the next step would be for Hong Kong to scrap all COVID-19 measures.