Oct. 21 (Bloomberg) -- Malaysia’s ringgit had its first weekly decline this month as investors reduced holdings of emerging-market assets on concern there will be no quick solution to Europe’s debt crisis.
The currency fell the most in a month today ahead of a meeting of European leaders in Brussels on Oct. 23 that had been the deadline for an agreement to end the crisis. Another summit to be held on Oct. 26 was announced yesterday after Germany and France said the European Union needs more time to seal a “global and ambitious” accord. Malaysia will report around 5 p.m. local time that inflation was steady in September at 3.3 percent, according to a Bloomberg News survey.
“Everybody is waiting for the outcome of the EU summit this weekend,” said Ahmad Zubaidi Samse, a foreign-exchange trader at Bank Muamalat Malaysia Bhd. in Kuala Lumpur. “Our central bank will maintain the current interest rate at the same level until the second half of next year.”
The ringgit dropped 0.8 percent to 3.1540 per dollar this week as of 4:36 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. It fell 0.9 percent today. The currency has advanced 1.3 percent so far this month after slumping 7 percent in September, the worst monthly loss since June 1998.
Bank Negara Malaysia meets next month after holding its overnight policy rate steady at 3 percent on Sept. 8.
Government bonds were unchanged this week. The yield on Malaysia’s 3.434 percent bonds due August 2014 was at 3.16 percent, according to Bursa Malaysia. The rate dropped one basis point, or 0.01 percentage point, today.
--Editors: Andrew Janes, Sandy Hendry
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