Ringgit drops to two-week low in catchup play

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TOKYO (Jan 22): Ringgit weakens to a two-week low, playing catch-up with losses in other emerging Asian markets as trading in Malaysia resumes after a holiday.

* USD/MYR climbs 0.3% to 4.1252, the strongest since Jan 7

* "The weakening in the ringgit over the past week is broadly in line with other regional currencies, and it’s giving up its strong gains made in late December to early part of January," says Khoon Goh, head of research at Australia and New Zealand Banking Group in Singapore

** A recent recovery in oil prices hasn’t helped push ringgit higher, but it may help support the currency

** The ringgit is facing some challenges as economic growth has been disappointing last year, and downside risk continues to stay in place in the near term; may underperform regional peers

* NOTE: Bank Negara Malaysia meets on Thursday and is expected to leave its overnight policy rate unchanged at 3.25%, though the possibility of a rate cut has risen with the slump in oil prices and pressure on exports from the US-China trade war

* Malaysia’s 10-year govt bond yield steady at 4.07%

* Bank Negara to announce foreign reserves data as of Jan 15 on Tuesday

* Malaysia plans to sell ¥200 billion of 10-year bonds, guaranteed by Japan Bank of International Cooperation, in the next few months at a yield less than 0.65%, Finance Minister Lim Guan Eng said on Friday