Ringgit Falls Most in 3 Weeks, Bonds Drop on Fitch Outlook Cut
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Malaysia’s ringgit declined the most in three weeks and bonds extended losses after Fitch Ratings cut the nation’s credit outlook to negative from stable, citing rising debt levels and a lack of budgetary reform.
The currency dropped to a three-year low and 10-year bond yields climbed to the highest since April 2011 after Fitch said in a statement yesterday that Malaysia’s public finances are its “key rating weakness.” The shrinking current-account surplus and $2.9 billion of sovereign debt maturing today raises the risk of capital outflows, putting the ringgit on course for its worst month in more than a year.