Bloomberg News

Ringgit Posts Weekly Gain After Moody’s Raises U.S. Debt Risk

June 03, 2011

June 3 (Bloomberg) -- Malaysia’s ringgit strengthened this week by the most in more than a month as investors cut demand for the dollar after Moody’s Investors Service warned the U.S. of a possible downgrade.

The ringgit snapped a four-week loss after Moody’s said it may place the Aaa rating, the highest investment grade, under review should the U.S. not make progress in addressing its debt ceiling by mid-July. A government report today showed the Southeast Asia nation’s exports rose 11.1 percent in April from a year earlier, slower than the 11.3 percent growth estimated by economists surveyed by Bloomberg.

“The Moody’s report changes the ballgame and shifts investors’ focus from Europe to the U.S.,” said Suresh Kumar Ramanathan, a foreign-exchange strategist at CIMB Investment Bank Bhd. in Kuala Lumpur. “The ringgit is holding firm because of the knock-on effect from the dollar weakness.”

The ringgit climbed 0.1 percent to 3.0120 per dollar as of 4:40 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. The currency appreciated 0.7 percent this week, the most since the period ended April 29.

Standard & Poor’s in April said the U.S. risks losing its AAA credit rating unless the government reduces the budget deficit and national debt.

Malaysia’s government bonds fell today and were unchanged for the week. The yield on the 4.16 percent note due July 2021 rose six basis points, or 0.06 percentage point, according to prices from Bursa Malaysia. The rate was at 3.98 percent yesterday, the lowest level since March 17.

--Editors: Simon Harvey, Andrew Janes

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To contact the reporter responsible for this story: Elffie Chew in Kuala Lumpur at echew16@bloomberg.net.

To contact the editor responsible for this story: James Regan at jregan19@bloomberg.net.


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