Ringgit Drops to Three-Year Low on Signs China Growth Slowing

The ringgit sank to a three-year low and government bonds fell as the prospect of slower growth in China dimmed the outlook for Malaysian shipments.

The Purchasing Manager’s Index in Asia’s largest economy and Malaysia’s second-biggest export market dropped to the lowest level in 10 months in July, according to the median estimate in a Bloomberg survey before data due Aug. 1. The Southeast Asian nation’s overseas shipments declined in each of the four months through May from a year earlier, the longest losing streak since 2009, official data show.

The ringgit fell 0.6 percent to 3.2285 per dollar as of 4:06 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. That’s the biggest decline in three weeks and the lowest level since July 19, 2010. The currency dropped 2.1 percent this month and 5.3 percent in 2013.

“Regional exports have been weak and China’s PMI fuels more concern,” said Wee-Khoon Chong, a strategist at Societe Generale SA in Hong Kong. “The Malaysian currency could weaken further with support at 3.2558.”

One-month implied volatility, a measure of expected moves in the exchange rate used to price options, climbed 35 basis points, or 0.35 percentage point, to 8.06 percent.

The yield on the 3.26 percent government bonds maturing March 2018 increased two basis points to 3.65 percent, the highest since the debt was sold in March, according to data compiled by Bloomberg.

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