KUALA LUMPUR, Dec 8 — Malaysia could be in danger of seeing a swing in its currency exchange rate if emerging markets become volatile or unstable again, the Financial Times (FT) wrote in a recent report.

Citing Nomura’s analysis of emerging economies, the business paper attributed the possible fall of the Malaysian ringgit’s value to the rise in the country’s current account deficit since 2006.

“Nomura concludes that countries such as Indonesia, Thailand, Malaysia and South Africa are now very vulnerable to currency swings; since 2006, these countries have seen their non-cyclical deficits increase by 6.5, 2.9, 10.3 and 1.9 per cent respectively,” FT reported, noting that Nomura has observed such related trends for over three decades.

In comparison, China, Korea, the Philippines, Hungary and Mexico are in a less vulnerable position as their current accounts - except for China - have shown improvements, FT said.

Current account statistics are a key indicator of possible currency swings, FT said, explaining that countries with high deficits or debts typically have slower growth and vice versa.

“And when current account deficits expand in a non-cyclical manner, this tends to herald lower growth and looming currency trouble – not just in decades past, but more recently too,” it said.

Emerging countries also tend to be not integrated into global markets, it said.

According to financial newswire Bloomberg last month, Malaysia’s current account surplus widened to RM10.7 billion in the third quarter from RM2.6 billion in the preceding three months.

Malaysia’s foreign reserves have also surged and stood at RM446.2 billion or USD 137.1 billion as of October 31 this year.