Ringgit falls to 1-year low as oil renews drop

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KUALA LUMPUR (Nov 15): Ringgit touches a one-year low as crude prices struggle to halt losses, weighing on the outlook for Malaysia’s oil revenue.

* USD/MYR steady at 4.1965; reached 4.1975, highest since November 2017

** Support 4.1562, 4.1227, 4.0900; resistance 4.1990, 4.2437, 4.2531

** NOTE: Brent resumed a decline Thursday after climbing 1% overnight

* Ringgit is holding up relatively well in the face of the oil-price slump as offshore speculation has eased after BNM enforced FX trading regulations in 2016, says Maximillian Lin, an emerging-markets Asia strategist at NatWest in Singapore

** MYR may drop further if oil prices remain low; other risks include U.S.-China trade tensions and concern about Malaysia’s fiscal deficit

** “Further ringgit weakness, however, will be gradual as the central bank closely monitors FX activity”

* 10-year govt bond yield advanced 4bps to 4.18% Wednesday

* Govt sold 2025 Islamic debt at average 4.212% yield, with bid-to-cover ratio of 2.81 times on Wednesday

** Demand was strong as 7-year Islamic bonds had cheapened in the run-up to the auction, and yields above 4.20% for the debt probably appealed to the investors, according to note from Maybank Kim Eng Securities

* Malaysian bonds could come under further pressure despite renewed inflows in October, as concerns about the fiscal position linger: Westpac

* Prosecutors will charge Rosmah Mansor, wife of former PM Najib Razak, on Thursday in relation to several cases linked to solar power supply and installation projects in schools in Sarawak state: anti-graft officials