Ringgit Forwards Fall Before Data Forecast to Show Slower Growth

Malaysian ringgit forwards fell, approaching a six-month low, before data forecast to signal growth in Southeast Asia’s third-largest economy is slowing. The currency declined for a second day in the spot market.

Exports rose 1.4 percent in December from a year earlier, compared with 3.3 percent in November, while industrial- production growth eased to 6 percent from 7.5 percent in the same period, according to separate Bloomberg surveys of economists before official figures due tomorrow. The European Central Bank will meet today to review policy amid calls for Spanish Prime Minister Mariano Rajoy to resign after contested reports that he or members of his People’s Party received illegal payments.

“The pace of growth for Malaysia’s exports and industrial production could dip a bit,” said Choong Yin Pheng, senior manager for fixed income and economic research at Hong Leong Bank Bhd. in Kuala Lumpur. “The political concerns in Spain are top on investors’ radar.”

Twelve-month non-deliverable forwards dropped 0.1 percent to 3.1631 per dollar as of 8:58 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. The contracts touched 3.1651, approaching the 3.1906 level reached on Feb. 1, which was the weakest since Aug. 3. The contracts to buy or sell the ringgit in a year traded at a 1.9 percent discount to the spot rate. Non-deliverable forwards are settled in dollars.

The ringgit weakened 0.1 percent to 3.1035 per dollar, data compiled by Bloomberg show. The currency’s one-month implied volatility, a measure of expected moves in the exchange rate used to price options, held at 7.70 percent.

Government bonds were steady yesterday. The yield on the 4.16 percent notes due July 2021 held at 3.46 percent, according to Bursa Malaysia.

To contact the reporter on this story: Liau Y-Sing in Kuala Lumpur at yliau@bloomberg.net

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net

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