Ringgit Rises Most in a Week After GDP Growth Beats Estimates
Malaysia’s ringgit rose the most in more than a week after economic growth unexpectedly accelerated in the second quarter.
Gross domestic product increased 5.4 percent from a year earlier, beating all 23 estimates in a Bloomberg survey of economists, according to figures released by the central bank. The median forecast was for growth to slow to 4.6 percent from 4.9 percent in the first quarter. Expansion for the full year may be at the upper end of the projected 4 percent-to-5 percent range even as risks from Europe and the U.S. remain, Bank Negara Malaysia said.
“Demand for the ringgit is on the uptake because of the strong second-quarter GDP,” said Yeo Chin Tiong, head of financial markets at Alliance Bank Bhd. in Kuala Lumpur. “In the near term, the Malaysian currency should trade in a tight range in the absence of positive news.”
The ringgit gained 0.2 percent to 3.1273 per dollar as of 9:08 a.m. in Kuala Lumpur, after weakening 0.5 percent yesterday, according to data compiled by Bloomberg. One-month implied volatility, a measure of exchange-rate swings used to price options, rose three basis points, or 0.03 percentage point, to 6.65 percent.
The government also reported yesterday a 1.4 percent increase in consumer prices for July, less than the median forecast for a 1.6 percent gain in a Bloomberg survey. That was the smallest advance since March 2010.
Malaysia’s five-year bonds declined yesterday. The yield on the 3.314 percent notes due October 2017 rose three basis points to 3.35 percent, the highest level since the debt was sold in April, according to Bursa Malaysia.
To contact the reporter on this story: Elffie Chew in Kuala Lumpur at email@example.com.
Bloomberg reserves the right to edit or remove comments but is under no obligation to do so, or to explain individual moderation decisions.