Bloomberg News

Ringgit Set for Weekly Gain on Malaysia’s GDP Growth Forecast

October 13, 2011

Oct. 14 (Bloomberg) -- Malaysia’s ringgit was set for a second weekly gain after Prime Minister Najib Razak forecast that economic growth will quicken next year.

Gross domestic product may rise as much as 6 percent from a maximum of 5.5 percent this year and the country’s budget deficit is forecast to narrow to 4.7 percent of GDP from 5.4 percent, Najib said last week. Industrial output rose a faster- than-expected 3 percent in August from a year earlier after contracting a revised 0.5 percent in July, the Statistics Department said on Oct. 11. The ringgit held its advance after neighboring Singapore reduced the pace of currency gains it is seeking rather than halting appreciation.

“The ringgit is firmer for the week because of the better local economic data,” said Suresh Kumar Ramanathan, a currency strategist at CIMB Investment Bank Bhd. in Kuala Lumpur. “The pressure for the ringgit to weaken is still there given current global uncertainties.”

The ringgit gained 0.5 percent this week to 3.1440 per dollar as of 9:28 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. The currency was little changed today.

The Singapore dollar advanced 0.3 percent after the nation’s central bank said it would seek slower currency appreciation this year as the global economy slows.

Malaysian government bonds fell this week. The yield on the 4.262 percent notes due September 2016 rose one basis point, or 0.01 percentage point, to 3.33 percent through yesterday, according to Bursa Malaysia.

--Editors: Ven Ram, Simon Harvey

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: Sandy Hendry at shendry@bloomberg.net.


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