Oct. 25 (Bloomberg) -- Malaysia’s ringgit rose for a second day on speculation gains in domestic stocks will prompt overseas investors to add to their holdings.
The ringgit appreciated as data from U.S. research firm EPFR Global showed emerging-market equity funds took in the most cash in the third week of October since early May. The euro strengthened above 1.39 per dollar yesterday for the first time in six weeks, signaling increased optimism European leaders will reach agreement on a debt rescue plan before a deadline tomorrow.
“Gradually, risk appetite is coming back,” said Akira Banno, a treasury adviser at Bank of Tokyo-Mitsubishi UFJ in Kuala Lumpur. “If the European Union fails to provide a good recovery path for European banks, risk aversion may happen again.”
The ringgit strengthened 0.3 percent to 3.1270 per dollar as of 4:19 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. The currency has rallied 2.2 percent so far in October after slumping 7 percent in September, the worst monthly loss since June 1998.
The benchmark FTSE Bursa Malaysia KLCI Index of shares advanced for a second day before local financial markets close tomorrow for the Hindu Deepavali festival.
Government bonds rose. The yield on the 3.434 percent notes due August 2014 declined two basis points, or 0.02 percentage point, to 3.13 percent, according to Bursa Malaysia.
--Editors: Simon Harvey, Ven Ram
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