Ringgit Rises for Fourth Day as Cyprus Seen Spurring Asia Inflow

Malaysia’s ringgit gained for a fourth day on speculation that inflows into Asia’s emerging markets will increase as bank bailouts put European savings at risk. Government bonds were steady.

Cypriot President Nicos Anastasiades agreed yesterday to shut the country’s second-largest bank and impose a tax on deposits of more than 100,000 euros to secure a 10 billion-euro ($13 billion) bailout. The ringgit will benefit also from Malaysia’s “diligent” monetary policy which is supporting the nation’s exports, according to Barclays Plc.

“If you are a European deposit holder who’s lucky enough to have 100,000 euros, you may well be looking for a new home for that money,” said Jonathan Cavenagh, a currency strategist at Westpac Banking Corp. (WBC) in Singapore “Europe’s pain is potentially Asia’s gain.”

The ringgit climbed 0.1 percent to 3.0973 per dollar as of 9:35 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. One-month implied volatility, a measure of expected moves in exchange rates used to price options, was steady at 6.94 percent.

The yield on 3.26 percent sovereign bonds due March 2018 was 3.23 percent, according to data compiled by Bloomberg.

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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