Ringgit Set for Fifth Weekly Gain as Japan Easing Lures Inflows
The ringgit headed for a fifth weekly gain on speculation Japan’s unprecedented monetary-easing program is spurring investment in Malaysian assets. Government bonds advanced.
The ringgit has been the biggest gainer after the Thai baht against the dollar this month among Asia’s 11 most-traded currencies after the Bank of Japan (8301) announced April 4 that it would buy 7.5 trillion yen of debt a month. The North Asian nation is Malaysia’s second-biggest overseas market. Prime Minister Najab Razak said this week he is “cautiously optimistic” his party can reclaim a two-thirds majority in parliament in the general elections on May 5.
“The ringgit and other Asian currencies have gained on capital inflows from Japan,” said Wee-Khoon Chong, a rates strategist in Hong Kong at Societe Generale SA. The ringgit may weaken in the near term due to investor caution before the elections, he said.
The ringgit strengthened 0.1 percent this week to 3.0352 per dollar as of 10:06 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. The currency, which was little changed today, has advanced 1.9 percent this month. One-month implied volatility, a measure of expected moves in exchange rates used to price options, rose 38 basis points, or 0.38 percentage point, today and 86 basis points this week to 7.83 percent, according to data compiled by Bloomberg.
The yield on the 3.26 percent notes due March 2018 rose one basis point this week to 3.16 percent and was steady today, according to data compiled by Bloomberg.
To contact the reporter on this story: Elffie Chew in Kuala Lumpur at firstname.lastname@example.org.
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