Friday 29 Mar 2024
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(Feb 6): Malaysia’s ringgit rebounded following a two-week loss as a recovery in crude prices eased concern that finances will deteriorate in the oil-exporting nation.

The currency appreciated 2.3 percent to 3.5470 a dollar in Kuala Lumpur in a shortened trading week due to holidays Monday and Tuesday, data compiled by Bloomberg show. That’s the biggest gain since September 2013. Implied volatility in the ringgit dropped the most in a year.

Trade data this week that beat economists’ estimates helped boost sentiment for the ringgit, which has dropped 9.8 percent in six months amid a slide in Brent crude, crimping revenue for Asia’s only major oil exporter. The government last month revised its 2015 budget-deficit target higher and cut the economic growth forecast because of the impact from oil.

“The ringgit has rallied on the back of a recovery in oil prices,” said Khoon Goh, a strategist at Australia & New Zealand Banking Group Ltd. in Singapore. “There’s reduced concern over Malaysia’s external balances after yesterday’s better-than-expected trade surplus number.”

Malaysia’s exports increased 2.7 percent in December from a year earlier, more than a 2.1 percent increase in November, according to a report Thursday from the Department of Statistics. The trade surplus narrowed to 9.2 billion ringgit ($2.6 billion) from 11.1 billion ringgit. Both exceeded the median estimates in Bloomberg surveys of 1 percent and 9 billion ringgit, respectively.

Debt Holdings

Foreign-exchange reserves data for the two weeks to Jan. 30 were due today, before being postponed to Jan. 10 by the central bank. The government will report fourth quarter and full-year growth figures next Thursday.

The ringgit climbed 0.8 percent Friday and rose as high as 3.5382 a dollar, the strongest since Jan. 6. One-month implied volatility, a gauge of exchange-rate swings used to price options, fell 81 basis points this week to 9.88 percent.

Malaysia’s 10-year sovereign bonds rose for a second week. The yield dropped four basis points, or 0.04 percentage point, to 3.78 percent and rose one basis point today, according to data compiled by Bloomberg.

Global funds cut holdings of the nation’s government and corporate debt by 4.5 percent to 225.9 billion ringgit in December from the previous month, the lowest level since August 2013, central bank data show.

 

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