Ringgit Retreats From One-Month High After Euro-Zone Downgrades
Malaysia’s ringgit retreated from the strongest level in a month on concern Europe’s credit crisis will slow Southeast Asia’s third-biggest economy.
The MSCI Asia-Pacific Index (MXAP) of shares slid the most in almost a month after Standard & Poor’s cut the ratings of nine euro-region nations, including France, late last week. Malaysia’s inflation cooled to 3.1 percent in December, the least in nine months, according to the median estimate of economists in a Bloomberg News survey before official data due on Jan. 18. The government reported last week that export growth and industrial production slowed in November.
“The downgrades validate existing fears everything isn’t right in the euro zone,” said Radhika Rao, an economist at Forecast Pte in Singapore. “That’s why Asian currencies are weaker. I don’t see reason for Bank Negara Malaysia to come in as of now.”
The ringgit dropped 0.4 percent to 3.1455 per dollar as of 4:06 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. The currency reached 3.1260 on Jan. 13, the strongest level since Dec. 8.
The yield on the government’s 3.434 percent bonds due August 2014 fell one basis point, or 0.01 percentage point, to 3.01 percent, according to Bursa Malaysia.
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