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Ringgit Rises Toward 11-Week High as Rebound in Exports Forecast

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Jan. 8 (Bloomberg) -- Malaysia’s ringgit rose toward an 11-week high before data that economists forecast will show a recovery in the nation’s exports. Government bonds declined.

Overseas sales increased 2.3 percent in November from a year earlier, compared with a 3.2 percent decline in October, according to the median estimate in a Bloomberg survey before data due tomorrow. Industrial production rose 5.9 percent in November, the most since May, according to another Bloomberg survey before a report on Jan. 10. U.S. lawmakers passed a bill last week to avert more than $600 billion of spending cuts and tax increases.

“Malaysian growth could remain fairly resilient,” said Vishnu Varathan, a Singapore-based economist at Mizuho Corporate Bank Ltd. “The fiscal cliff issue finding some kind of relief has meant that markets have moved away from bracing for a more catastrophic outcome.”

The ringgit advanced 0.1 percent to 3.0415 per dollar as of 4:51 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. It touched 3.0363 earlier, near the 3.0296 level reached on Jan. 3, which was the strongest since Oct. 18. One-month implied volatility, a measure of expected moves in exchange rates used to price options, fell 10 basis points to 5.22 percent.

Moody’s Investors Service raised the long-term foreign-currency bond ceiling for Malaysian issuers to A1 from A3 yesterday, citing the country’s “healthy” current-account surplus.

Default Swaps

Five-year credit-default swaps on Malaysian debt rose four basis points, or 0.04 percentage point, to 73 in New York after reaching a one-month low yesterday, according to data provider CMA, which is owned by McGraw-Hill Cos. and compiles prices quoted by dealers in the privately negotiated market. The contracts pay the buyer face value in exchange for the underlying securities or the cash equivalent should a borrower fail to adhere to its debt agreements.

The yield on the 3.314 percent sovereign notes due October 2017 climbed four basis points, or 0.04 percentage point, to 3.26 percent, according to Bursa Malaysia.

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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