Ringgit Drops to Five-Year Low as Oil Declines, Dollar Advances

The ringgit dropped to the weakest level in more than five years as falling crude oil prices and a rising dollar sapped demand for the Malaysian currency.

Brent crude declined 4 percent this week, reinforcing concern about a drop in revenue for Malaysia, a net oil exporter. Global funds trimmed holdings of the nation’s debt by 5.8 percent, the most since September 2011, to 236.5 billion ringgit ($67.3 billion) in November, central bank data showed Dec. 31. The Bloomberg Dollar Spot Index, which tracks the greenback against 10 currencies, gained 0.4 percent today.

“The weakness in Brent crude and the dollar’s strength continue to weigh on the ringgit,” said Vishnu Varathan, a Singapore-based economist at Mizuho Bank Ltd. “Bank Negara’s data validate that foreign investors have been selling.”

The ringgit fell 0.6 percent to 3.5165 a dollar in Kuala Lumpur, taking the week’s loss to 0.7 percent, according to data compiled by Bloomberg. The currency dropped to 3.5208 earlier, the lowest level since September 2009.

Ten-year government bonds were unchanged, with the yield on the notes due July 2024 at 4.14 percent today, data compiled by Bloomberg show. It declined one basis point, or 0.01 percentage point, this week.

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