Ringgit Gains Most in Three Weeks as Growth Seen Accelerating

Malaysia’s ringgit climbed the most in almost three weeks before reports forecast to show the nation’s economic growth accelerated and the current-account surplus widened. Government bonds were little changed.

Gross domestic product increased 4.7 percent in the third quarter from 4.3 percent in the previous three months, according to the median estimate of 17 economists surveyed by Bloomberg News before official data due at 6 p.m. local time. The ringgit rose for a second day after Federal Reserve chairman nominee Janet Yellen said yesterday she would maintain the record stimulus that has stoked global asset gains and suppressed borrowing costs until the U.S. economy is stronger.

“Risk appetite for Asian currencies is improving because Yellen’s statement sends a strong signal that tapering will be on the back burner for a while,” said Yeah Kim Leng, chief economist at RAM Holdings Bhd. in Kuala Lumpur. “The ringgit’s strength will be further supported by the improvement in domestic economic data.”

The currency appreciated 0.3 percent to 3.1951 per dollar as of 9:14 a.m. in Kuala Lumpur, the steepest increase since Oct. 28, according to data compiled by Bloomberg. It dropped 0.5 percent for the week.

One-month implied volatility, a measure of expected moves in the exchange rate used to price options, fell two basis points, or 0.02 percentage point, to 8.73 percent. The gauge declined 31 basis points this week.

Malaysia’s current-account surplus widened to 10.7 billion ringgit ($3.3 billion) in the third quarter from 2.6 billion ringgit in the preceding three months, according to the median forecast of analysts polled by Bloomberg News before data due at 6 p.m. local time today.

The yield on the 3.48 percent bonds due March 2023 was little changed at 3.89 percent, according to data compiled by Bloomberg. The rate rose 17 basis points this week.

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

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

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