KUALA LUMPUR: Malaysia’s ringgit fell to its weakest level in almost five years against the greenback yesterday, along with most emerging Asian currencies on political uncertainty in Greece.

The ringgit slid to a low of 3.50 yesterday, down 6.41% from 3.2755 a year ago and a marginal 0.09% to 3.4970 the previous day, and in the process going down as one of the worst-performing currencies in Asia.

This was on the back of the missing Indonesia AirAsia’s flight QZ8501, and the country’s worst floods in a decade, which has forced nearly a quarter of a million people from their homes.

Analysts blamed the recent ringgit sell-off on the slump in oil prices. The price of Brent crude oil halved to US$57.85 (RM202.47) per barrel yesterday, from US$115.06 on June 19.

They warned that at an average oil price of around US$70 a barrel, Malaysia’s current account surplus for next year could fall to a level less than half of that in 2014.

A head of research, who declined to be named, told The Edge Financial Daily that he expects the country’s trade balance in November to be worse than in the preceding month due to lower oil product exports.

“The weak ringgit has also attracted the attention of speculators, and that’s not good,” he said, expecting the local currency to remain weak going into the New Year.

According to Reuters, regional currencies have lost ground so far this year partially due to expectations that the US Federal Reserve may raise interest rates in 2015, prompting investors to withdraw funds from emerging markets, including Malaysia, and channel them back to the United States.

Apart from the ringgit, the yuan fell as much as 0.2% to 6.2362 per US dollar, its weakest since June, on growing bearish sentiment towards the currency, Reuters reported.

The euro also dipped to a 29-month low against the US dollar yesterday, as the announcement of a snap election in Greece threw the country into a fresh round of political turmoil.

“The political uncertainty hurts risk appetite, dragging Asia-Pacific stocks outside Japan lower,” Reuters reported.

This article first appeared in The Edge Financial Daily, on December 31, 2014.