Malaysia's currency, already under pressure from a political scandal and the oil price drop, really fell out of bed Monday, with the ringgit falling nearly 1 percent.
The central bank, Bank Negara Malaysia (BNM), has been intervening in the market to support the currency, but analysts said those efforts may be stumbling.
"(The central bank) can't hold the level of the currency where it is, given that their reserves have been declining. Now maybe they're starting to throw the towel," Khoon Goh, senior foreign-exchange strategist at ANZ, told CNBC Monday, noting he hadn't expected the currency to hit the 3.85-handle until next year.
The U.S. dollar was fetching as much as 3.85 ringgit in Asian trade Monday, compared with around 3.8156 ringgit Friday, before the Malaysian currency abruptly strengthened to 3.8460 against the U.S. dollar around midday. That's still hovering around its weakest levels since 1998, during the Asian Financial Crisis, with the currency among the world's worst performing after falling around 10 percent so far this year.
"Domestic political developments are suddenly to the fore and on top of that we have (central bank) Bank Negara, which tried to hold the currency earlier in July at around the 3.80 level (against the U.S. dollar) and using up around $5 billion of their FX reserves," Goh said. "I think that reserves are probably under the psychological $100 billion mark now and I think that is starting to spook the market."