Ringgit extends declines as Greece concern damps risk appetite

Malaysia's ringgit fell to a one-week low after European lawmakers failed to agree on a bailout plan for Greece, damping risk appetite on lingering concern the nation will default and exit the euro. -- PHOTO: BLOOMBERG
Malaysia's ringgit fell to a one-week low after European lawmakers failed to agree on a bailout plan for Greece, damping risk appetite on lingering concern the nation will default and exit the euro. -- PHOTO: BLOOMBERG

KUALA LUMPUR (Bloomberg) - Malaysia's ringgit fell to a one-week low after European lawmakers failed to agree on a bailout plan for Greece, damping risk appetite on lingering concern the nation will default and exit the euro.

The ringgit dropped for a fourth day and bonds declined before reports on Malaysia's economic growth and the current account for the last quarter, which may reflect the slump in oil. Gross domestic product for all of 2014 rose 5.9 per cent, the fastest since 2010, according to the median estimate in a Bloomberg survey. Euro region finance ministers will resume talks next week on how to keep bailout funds flowing to Greece.

"People are in a cautious and risk-off mode again following what happened over Greece," said Choong Yin Pheng, senior manager for bond and economic research at Hong Leong Bank Bhd. in Kuala Lumpur. "We are still expecting a moderating trend for the Malaysian economy going into next year because of the oil price and the softer global outlook."

The ringgit depreciated 0.5 per cent to 3.6185 per US dollar as of 9:45 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. It earlier fell to 3.6233, the lowest level since Feb. 3, and has lost 2 per cent in four days.

Fourth-quarter GDP increased 5 per cent from a year earlier, the least since the three months ended September 2013, the survey shows. The current-account surplus probably rose to RM9.8 billion from 7.6 billion ringgit, according to a separate survey.

The ringgit has fallen 7.8 per cent in the past three months, the worst performance in Asia, as a 51 percent decline in Brent crude since June cut earnings for the net oil exporter.