Ringgit Forwards Advance Most in a Week as GDP Beats Estimates

Malaysia’s ringgit forwards strengthened by the most in almost two weeks after official data showed the country’s economic growth beat estimates. Government bonds declined.

Gross domestic product rose 5.2 percent in the third quarter from a year earlier, more than the 4.8 percent increase forecast in a Bloomberg News survey, according to a Nov. 16 report. Central bank governor Zeti Akhtar Aziz said at press briefing in Kuala Lumpur that day that full-year expansion will be a least 5 percent, compared with an earlier projection of 4 percent to 5 percent.

“The better economic data is helping to drive demand for the ringgit,” said Azmi Shukri Rahman, a foreign-exchange trader at CIMB Investment Bank Bhd. in Kuala Lumpur. “Expectations of inflows into the Malaysian equity and bond markets should also keep the currency firm in the near term.”

Twelve-month non-deliverable forwards appreciated 0.2 percent to 3.1193 per dollar as of 4:33 p.m. in Kuala Lumpur, the biggest advance since Nov. 7, according to data compiled by Bloomberg. The contracts to buy or sell the ringgit in a year traded at a 1.8 percent discount to the spot rate. Non- deliverable forwards are settled in dollars.

The ringgit rose 0.3 percent to 3.0640 per dollar, data compiled by Bloomberg showed. One-month implied volatility, a measure of exchange-rate swings used to price options, declined 32 basis points, or 0.32 percentage point, to 5.20 percent, the least since April 2008.

The yield on the 3.314 percent notes maturing in October 2017 rose one basis point to 3.18 percent, according to Bursa Malaysia.

To contact the reporter on this story: Elffie Chew in Kuala Lumpur at echew16@bloomberg.net.

To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net