Ringgit drops to lowest since Nov 2006

 

MALAYSIA'S ringgit fell to the lowest in more than two years on concern a deepening economic slowdown will prompt investors to increase sales of regional assets.

The currency weakened for a third day after reports yesterday showed manufacturing gauges fell to record lows in China, the UK and Russia, pushing down US stocks and the MSCI Asia Pacific Index of regional shares. The US economy, the world’s largest, entered a recession in December 2007, the National Bureau of Economic Research said yesterday.

“Negative indicators are going to pull Asian currencies down,” said Yeo Chin Tiong, head of treasury at OSK Investment Bank Bhd in Kuala Lumpur. “It’s worrying for the ringgit if this trend persists.”

The ringgit dropped 0.3 per cent to 3.6399 per dollar as of 4:43 pm in Kuala Lumpur, according to data compiled by Bloomberg. It reached 3.6455, the lowest since November 2006, extending this year’s slump to 9.1 per cent.

A trade ministry report in two days may show exports grew 6.3 per cent in October, the least since March, according to a Bloomberg survey of economists. Slowing exports dragged down economic growth in the third quarter to the least in three years, Bank Negara Malaysia said on November 28.

Foreign investors have almost halved their holdings of Malaysia’s bonds since they peaked at RM126.5 billion (US$34.8 billion) at end-April, according to central bank data. - Bloomberg