Malaysia’s ringgit fell toward its weakest level in almost two months after the central bank forecast slower economic growth.
Southeast Asia’s third-biggest economy may expand 4 percent to 5 percent in 2012, the monetary authority said yesterday. That is less than the Finance Ministry’s 5 percent-to-6 percent predicted in October, and a 5.1 percent pace in 2011.
“The lower GDP target raises the possibility of a rate cut,” said Akira Banno, a treasury adviser at Bank of Tokyo-Mitsubishi UFJ Bhd. in Kuala Lumpur. “This will make the ringgit less attractive to investors.”
The ringgit declined 0.1 percent to 3.0800 per dollar as of 4:00 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. It touched 3.0890 yesterday, the weakest level since Jan 24.
One-month implied volatility, a measure of exchange-rate swings used to price options, fell eight basis points, or 0.08 percentage point, to 7.70 percent.
Five-year government bonds rose. The yield on the 4.262 percent notes due September 2016 fell seven basis points to 3.27 percent, according to Bursa Malaysia.