(Dec. 1): Malaysia’s ringgit headed for its biggest two-day decline since the 1997-98 Asian financial crisis and led losses in emerging markets on concern a protracted slide in crude will erode the net oil-exporting nation’s revenue.

The currency weakened 1.3 percent to 3.4250 per dollar as of 10:38 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. The ringgit has dropped 2.3 percent in two days, the sharpest decline since June 1998. A devaluation in the Thai baht the previous year triggered the Asia crisis and prompted Malaysia’s government to adopt a pegged exchange rate to the greenback that remained in place until 2005.

Brent slid 2.3 percent today to the lowest level in almost five years after OPEC’s decision last week not to cut production to shore up prices, which have slumped 41 percent from a June high. The potential revenue loss may make it harder for Prime Minister Najib Razak to lower the fiscal deficit to 3 percent of gross domestic product next year from 3.5 percent.

“Malaysia is probably most affected by oil prices in the Asian space,” said Andy Ji, a Singapore-based strategist at Commonwealth Bank of Australia. “The ringgit could fall to 3.45 this week.”

The currency last traded as low as that in February 2010, when it went on to reach 3.4545 on the 5th of that month, data compiled by Bloomberg show. The ringgit was pegged at 3.8 per dollar until the policy was scrapped in 2005.

Bonds Fall

Oil-related industries account for a third of Malaysian state revenue and each 10 percent decline in crude will worsen the nation’s fiscal shortfall by 0.2 percent of GDP, Chua Hak Bin, a Bank of America Merrill Lynch economist in Singapore, wrote in an Oct. 22 report.

Malaysia’s current-account surplus narrowed to 7.6 billion ringgit ($2.2 billion) in the third quarter, the smallest gap since June 2013. A Dec. 5 report may show the nation’s exports rose 0.2 percent in October from a year earlier, according to the median estimate in a Bloomberg survey. That would be the smallest increase since a contraction in June 2013.

The nation’s sovereign bonds fell. The yield on the 4.181 percent notes due 2024 rose four basis points, or 0.04 percentage point, to 3.90 percent, data compiled by Bloomberg show. That’s the highest since Nov. 21. The three-year bond yield climbed five basis points to 3.64 percent, the highest since the debt was sold in March.