Oct. 11 (Bloomberg) -- Malaysia’s ringgit declined, snapping a five-day gain, on concern the European debt crisis may worsen even after the Southeast Asian nation’s factory output rebounded at a faster-than-expected pace.
The currency dropped 0.6 percent from its highest level in four weeks after European Central Bank President Jean-Claude Trichet said the region’s debt crisis now is threatening Europe’s financial system. It weakened to 3.1445 per dollar at 5:05 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. The ringgit earlier reached a high of 3.1050, the strongest since Sept. 19.
“The risk is on again with renewed concerns over the European debt crisis taking center stage,” said Zulkiflee Nidzam, Asian Finance Bank Bhd.’s head of foreign-exchange trading in Kuala Lumpur. “The pullback in the ringgit may continue in the near-term.”
Trichet told lawmakers in Brussels that Europe’s sovereign debt woes have spread from smaller countries to some larger ones. The region’s leaders are trying to shore up the region’s banks as they debate how best to manage the fallout from any Greek default.
“The crisis is systemic and must be tackled decisively,” he said. “Time is always of the essence when you have to be in a mode of crisis management.”
Malaysian industrial production climbed 3.0 percent in August from a year earlier after contracting a revised 0.5 percent in July, according to data from the Statistics Department today. That’s more than the 0.4 percent increase predicted by 16 economists in a Bloomberg News survey.
Government bonds declined. The yield on the 4.262 percent note due September 2016 gained two basis point, or 0.02 percentage point, to 3.35 percent, according to Bursa Malaysia.
--Editor: Barry Porter.
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