Malaysia’s ringgit gained for a fourth day on speculation inflows to Asia’s emerging markets will increase as bank bailouts put European savings at risk. Government bonds were steady.
Cypriot President Nicos Anastasiades agreed yesterday to shut the country’s second-largest bank and impose a tax on deposits of more than 100,000 euros to secure a 10 billion euro ($13 billion) bailout. The ringgit will benefit also from Malaysia’s “diligent” monetary policy which is supporting the nation’s exports, according to Barclays Plc.
“If you are a European deposit holder who’s lucky enough to have 100,000 euros, you may well be looking for a new home for that money,” said Jonathan Cavenagh, a currency strategist at Westpac Banking Corp. in Singapore “Europe’s pain is potentially Asia’s gain.”
The ringgit climbed 0.2 percent to 3.0943 per dollar as of 4:29 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. One-month implied volatility, a measure of expected moves in exchange rates used to price options, fell 20 basis points, or 0.2 percentage point, to 6.74 percent.
The yield on 3.26 percent sovereign bonds due March 2018 was little changed at 3.23 percent, according to data compiled by Bloomberg.