Ringgit Stems Slide as Dollar Demand Wanes With Fed Looming

  • Market locking in profits from dollar rally: Macquarie
  • Malaysia looking at more stimulus for economy: minister

Malaysia’s ringgit halted its longest losing streak in eight months as demand for the dollar waned, with investors looking to the Federal Reserve’s meeting to assess when policy makers will raise interest rates.

The ringgit climbed 0.1 percent to 4.0640 against the greenback in Kuala Lumpur after falling as much as 0.6 percent earlier, according to prices from local banks compiled by Bloomberg. The currency declined 2.9 percent in the previous six sessions. The Bloomberg Dollar Spot Index dropped 0.3 percent before the Federal Reserve Open Market Committee starts its two-day policy meeting in Washington Tuesday.

“The dollar has been strong for a few days,” said Nizam Idris, Singapore-based head of foreign-exchange and fixed-income strategy at Macquarie Bank Ltd. “There could be some profit-taking on the long dollar positions” before the FOMC decision Wednesday, he said.

Malaysia is looking to deploying more stimulus for its economy, Second Finance Minister Johari Abdul Ghani said in Kuala Lumpur. The government hasn’t dealt with individuals named in a U.S. probe related to state investment fund 1Malaysia Development Bhd. and will not protect persons who committed offenses abroad, Johari said.

Authorities in Singapore and the U.S. have moved to seize assets linked to alleged fraud involving 1MDB, the latest chapter in the troubled company’s woes which have dented sentiment toward the ringgit.

The yield on 10-year government bonds fell 16 basis points to 3.51 percent, according to prices from Bursa Malaysia. The five-year yield climbed four basis points to 3.23 percent.

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