Bloomberg News

Ringgit Is Little Changed on Speculation Central Bank to Step In

November 24, 2011

Nov. 24 (Bloomberg) -- Malaysia’s ringgit was little changed after dropping to a seven-week low on speculation policy makers will intervene to curb volatility in the currency. Government bonds rose.

The currency has lost 3.6 percent this month as investors favored safer bets than emerging-market assets amid Europe’s worsening debt crisis. The central bank is prepared to step into the market “to smooth out this excessive volatility or movement in any one particular day,” Governor Zeti Akhtar Aziz said in Kuala Lumpur on Nov. 18.

“The ringgit has weakened substantially and it’s no surprise that the central bank has to come in to temper weakness in the ringgit,” said Radhika Rao, an economist at Forecast Pte in Singapore. “The fundamentals are improving in Malaysia and there’s little reason for the ringgit to underperform. It’s mostly driven by external uncertainties.”

The ringgit traded at 3.1883 per dollar as of 9:14 a.m. in Kuala Lumpur, compared with 3.1878 yesterday, according to data compiled by Bloomberg. The currency touched 3.20 earlier, the weakest level since Oct. 5.

While the global growth outlook has become “significantly more uncertain,” prospects for emerging economies remain positive, Zeti said.

Gross domestic product rose 5.8 percent in the three months through September from a year earlier, after expanding a revised 4.3 percent in the prior quarter, Bank Negara Malaysia said last week. The median growth estimate of economists in a Bloomberg News survey was 4.8 percent.

The yield on the 3.434 percent notes due August 2014 declined four basis points, or 0.04 percentage point, to 3.08 percent, according to Bursa Malaysia.

Consumer prices rose 3.4 percent in October from a year earlier, matching the increase in September, the statistics department yesterday.

--Editors: Ven Ram, Andrew Janes

To contact the reporter on this story: Lilian Karunungan in Singapore at lkarunungan@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net.


Reviving Keynes
LIMITED-TIME OFFER SUBSCRIBE NOW
 
blog comments powered by Disqus