Ringgit Forwards Advance as Commodities Rebound Boosts Exports

Malaysian ringgit forwards climbed the most in two weeks as a rebound in crude and palm oil prices brightened the nation’s export outlook. Government bonds were little changed.

Crude climbed 3.9 percent this week, paring its drop this month to 6 percent, while palm oil gained 2.4 percent since April 22 after an earlier decline that was sparked by concern worldwide demand is slowing. Malaysia is the world’s second-largest palm oil producer and a net oil exporter. The country’s interest rates are likely to rise in 2013 as the domestic and global outlook improves, Goldman Sachs Group Inc. said in a research note yesterday.

“Malaysia is a net commodity exporter, so the stabilization in commodity prices can help the ringgit,” said Jonathan Cavenagh, a currency strategist at Westpac Banking Corp. in Singapore. “We’ve seen ringgit sentiment stabilize somewhat.”

Twelve-month non-deliverable forwards advanced 0.4 percent, the most since April 9, to 3.0974 per dollar as of 4:13 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. Non-deliverable forwards are settled in dollars. The contracts to fix the exchange rate in a year were at a 1.9 percent discount to the spot rate, which rose 0.4 percent to 3.0374.

One-month implied volatility in the ringgit, a measure of expected moves in the exchange rate used to price options, fell 31 basis points, or 0.31 percentage point, to 8.33 percent.

The yield on the 3.26 percent sovereign bonds due March 2018 held at 3.17 percent, according to data compiled by Bloomberg.

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