Malaysian ringgit on longest stretch of gains since 2011 as oil recovers

Malaysia's ringgit is headed for the longest stretch of gains since 2011 as Brent crude recovers.
Malaysia's ringgit is headed for the longest stretch of gains since 2011 as Brent crude recovers. PHOTO: REUTERS

KUALA LUMPUR - (Bloomberg) - Malaysia's ringgit is headed for the longest stretch of gains since 2011 as a recovery in Brent crude brightened the outlook for the oil exporter's finances amid a rally in global stocks.

Brent tested US$40 a barrel on Monday (March 7) for the first time since December, helping improve sentiment after a US jobs report on Friday came in better than analysts forecast and allaying some concern about the health of the world's biggest economy.

A collapse in commodities and slowing Chinese growth have weighed on emerging-market assets this year and spurred outflows from Asian equities.

"There's a better environment for risk, which is helping sentiment for currency markets in the region," said Mr Mitul Kotecha, head of Asian foreign-exchange and interest-rate strategy at Barclays in Singapore.

"Asia's taking the cue from the bounce in stocks. Oil's been rallying and generally some of the major concerns we saw earlier in the year seem to be receding at least for now."

The ringgit rose for an eighth day, strengthening 0.9 per cent to 4.0825 against the US dollar as of 9:12 a.m. in Kuala Lumpur, according to prices from local banks compiled by Bloomberg.

It touched 4.0765, the highest level since August. Bank Negara Malaysia will keep its benchmark 3.25 per cent interest rate unchanged for a 10th straight meeting at a review Wednesday, according to all 15 economists in a Bloomberg survey.

Malaysia's monetary policy remains accommodative and the central bank wants to see orderly conditions in the foreign exchange market, Governor Zeti Akhtar Aziz said on Jan 28. The ringgit ended 2015 as Asia's worst-performing currency as oil slid.