Ringgit Slides for a Fourth Day on Greece Debt Default Concern
Malaysia’s ringgit dropped for a fourth day, its longest losing streak in a month, as concern Greece will default prompts investors to favor the relative safety of the dollar and deters risk-taking.
Currencies fell across Asia’s developing nations after Germany and France withheld 8 billion euros ($11 billion) of aid to Greece yesterday and U.S. policy makers said unemployment is still “far too high.” French President Nicolas Sarkozy said Greece won’t receive a “single cent” in aid without holding to the terms of a bailout agreement reached last week. Greek Prime Minister George Papandreou has called a referendum on the deal.
“The Greece issue is encouraging people to buy dollars,” said Calbert Loh, the head of treasury at Bangkok Bank Bhd. in Kuala Lumpur. “The European debt crisis will continue to dominate sentiment for the rest of the year.”
The ringgit plunged 0.5 percent to 3.1485 per dollar as of 4:31 p.m. in Kuala Lumpur, extending this week’s loss to 2.7 percent, according to data compiled by Bloomberg. It touched 3.1603 earlier, the weakest level since Oct. 21.
Federal Reserve Chairman Ben S. Bernanke said yesterday the U.S. central bank may take further steps to boost growth, such as buying mortgage bonds or changing the way it communicates its policy goals to the public.
Zeti Akhtar Aziz, governor of Malaysia’s central bank, told reporters in Kuala Lumpur on Nov. 1 that “risks and conditions are highly dynamic” and policy makers will take steps to ensure future prospects for growth aren’t undermined. Official data due tomorrow are expected to show exports rose 12.1 percent from a year earlier in September, the most in 14 months, according to the median forecast of analysts surveyed by Bloomberg.
Malaysia’s benchmark five-year bonds were little changed. The yield on the 4.262 percent notes due September 2016 held at 3.33 percent, according to Bursa Malaysia.
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