Ringgit Drops Most in Three Months as Faster Inflation Forecast

Malaysia’s ringgit fell the most in three months before a report that economists predict will show consumer prices rose for the first time in 15 months.

Inflation accelerated to 1.4 percent in December from 1.3 percent in November, according to the median forecast in a Bloomberg survey before official data due on Jan. 23. The Southeast Asian nation’s central bank will keep policy rate on hold at 3 percent this quarter, a separate poll shows.

“Expectation of a potential turnaround in inflation could have a slight negative impact given that policy rates are likely to be on hold,” said Wee-Khoon Chong, a fixed-income strategist at Societe Generale SA in Hong Kong.

The ringgit weakened 0.7 percent to 3.0347 per dollar as of 4:48 p.m. in Kuala Lumpur, the biggest loss since Oct. 8, according to data compiled by Bloomberg. One-month implied volatility, a measure of exchange-rate swings used to price options, advanced 15 basis points, or 0.15 percentage point, to 5.22 percent.

Government bonds were little changed. The yield on the 3.418 percent notes due August 2022 held at 3.47 percent, according to Bursa Malaysia.

Before it's here, it's on the Bloomberg Terminal.