Ringgit Resumes Loss on Oil Decline, ECB’s Greek Funding Limits

Malaysia’s ringgit resumed losses as oil reversed gains and the European Central Bank’s tightening of terms for Greece’s access to financing damped risk appetite.

Brent crude fell 1 percent, adding to Wednesday’s 6.5 percent drop, the biggest since November. The ringgit briefly pared its decline after Malaysia, the only major oil exporter in Asia, reported trade figures that beat economists’ estimates. The ECB said it will no longer accept Greek bonds as collateral for loans, citing doubt over the new government’s commitment to reform pledges made under the previous administration.

“There is generalized risk aversion after the ECB essentially yanked the liquidity line,” said Vishnu Varathan, a Singapore-based economist at Mizuho Bank Ltd. “The drop in oil prices” was also weighing on the ringgit, he said.

The ringgit depreciated 0.3 percent to 3.5742 a dollar in Kuala Lumpur, according to data compiled by Bloomberg. The currency, which posted its biggest gain Wednesday since September 2013, retreated as much as 0.8 percent earlier.

Malaysian exports rose 2.7 percent in December from a year earlier, more than November’s 2.1 percent increase, the Department of Statistics reported Thursday. The trade surplus narrowed to 9.2 billion ringgit ($2.6 billion) from 11.1 billion ringgit. Both exceeded the median estimates in Bloomberg surveys of 1 percent and 9 billion ringgit, respectively.

“Malaysia’s trade surplus is slightly better than expected,” said Khoon Goh, a strategist at Australia & New Zealand Banking Group Ltd. in Singapore. “Exports beat expectations. This should help allay concerns over Malaysia’s external position.”

Local sovereign bonds were little changed, with the 10-year yield at 3.76 percent, data compiled by Bloomberg show. It dropped four basis points, or 0.04 percentage point, Wednesday.

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