Ringgit Falls for Third Day as Malaysia Outlook Falters With OilBy
Malaysia’s ringgit headed for its biggest three-day decline since May as a faltering recovery in crude prices dimmed the outlook for the oil-exporting nation’s finances.
Brent has lost more than 7 percent since reaching a two-month high in August amid concern that an oversupply of the commodity will extend into next year. The energy industry contributes to one-fifth of Malaysia’s gross domestic product and the rout in oil markets has hit exports and government coffers, forcing Prime Minister Najib Razak to lower the country’s economic growth forecast for two years in a row.
The ringgit retreated 0.6 percent to 4.1335 per dollar as of 8:56 a.m. in Kuala Lumpur, prices from local banks compiled by Bloomberg show. It reached 4.1390, the lowest since June 27, and has lost 2.1 percent in three days.
“A combination of weaker oil, risk-off sentiment in markets and recent weaker-than-expected economic data out of Malaysia all combined to push the ringgit weaker again today,” said Khoon Goh, the head of regional research at Australia & New Zealand Banking Group Ltd. in Singapore.
Malaysia’s exports unexpectedly shrank in July, while industrial production growth missed forecasts, official data showed this month.
Brent climbed 0.5 percent to $47.33 per barrel Wednesday, a day after slumping 2.5 percent. Malaysia derived some 22 percent of revenue from oil-related sources in 2015 and the government’s budget to be tabled in parliament on Oct. 21 may provide a glimpse of the impact of lower oil on government finances next year.
The MSCI Emerging Markets Currency Index was set to decline for a fourth day, its longest losing streak since a similar period ended June 14. Indonesia’s rupiah fell 0.4 percent, the Philippine peso dropped 0.3 percent and Taiwan’s dollar lost 0.2 percent. South Korea’s markets are shut through Friday for local holidays.
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