Ringgit Declines to One-Week Low on Cheaper Oil, Brexit Riskby
Malaysia’s ringgit fell to a one-week low as oil prices retreated and the prospect of the U.K. leaving the European Union fueled demand for haven assets.
Brent crude extended declines to a third session on Monday after recording its steepest fall in a month on Friday, weighing on the outlook for Malaysia, which derives about a fifth of government revenue from energy-related sources. A gauge of the dollar was steady after rising for the past two days as polls ahead of the June 23 referendum showed those backing a British exit from the EU are almost evenly split with those who favor staying.
“In the last New York session, the dollar rose against most emerging markets on fear of the Brexit risk,” said Masashi Murata, a vice president at Brown Brothers Harriman & Co. in Tokyo. “The oil price dropped on that as well, which led to a weaker ringgit.”
The ringgit depreciated 0.4 percent to end at 4.0877 a dollar and earlier reached 4.1085, the lowest since June 6, according to prices from local banks compiled by Bloomberg.
A report due Wednesday is forecast to show Malaysian consumer prices rose 2 percent in May from a year earlier, the slowest pace since April last year, according to the median estimate of economists in a Bloomberg survey.
Ten-year government bonds were little changed, with the yield at 3.87 percent, according to prices from Bursa Malaysia.