Ringgit extends slide as Asia's worst-performing currency weighed by oil

Malaysia's ringgit extended losses as this month's worst-performing Asian currency on concern a protracted drop in crude will weigh on the oil-exporting nation. -- PHOTO: BLOOMBERG
Malaysia's ringgit extended losses as this month's worst-performing Asian currency on concern a protracted drop in crude will weigh on the oil-exporting nation. -- PHOTO: BLOOMBERG

KUALA LUMPUR (Bloomberg) - Malaysia's ringgit extended losses as this month's worst-performing Asian currency on concern a protracted drop in crude will weigh on the oil-exporting nation.

The currency declined for a second day and reached a new 2009 low after Brent slid 2.3 per cent overnight on a report showing US oil stockpiles climbed to the highest level in weekly data going back to 1982.

Malaysia kept borrowing costs at 3.25 per cent Wednesday even as central banks around the world eased monetary policy amid slowing global growth and falling consumer prices. The nation's 10-year government bond yields headed for the biggest monthly decline since 2008.

"The ringgit is weakening on concern crude oil will fall further after the U.S. record inventory report," said Mr Nizam Idris, the Singapore-based head of foreign-exchange and fixed-income strategy at Macquarie Bank. "There is also growing pressure on central banks to ease monetary policy and Malaysia is probably doing so via weakening the currency."

The ringgit fell 0.4 per cent to 3.6340 a US dollar as of 10.08am in Kuala Lumpur, adding to Wednesday's 0.6 per cent loss, according to data compiled by Bloomberg. The currency earlier touched 3.6375, the weakest level since April 2009.

ING Groep cut its year-end forecast for the ringgit to 3.78 a US dollar from 3.68, after Singapore's central bank unexpectedly eased policy yesterday via its currency band.

Prime Minister Najib Razak last week reduced the country's 2015 growth forecast to 4.5 per cent to 5.5 per cent from as much as 6 per cent earlier due to the drop in oil.

The yield on the nation's 10-year sovereign bonds was little changed at 3.86 per cent after yesterday dropping six basis points, or 0.06 percentage point, data compiled by Bloomberg show. The yield has fallen 29 basis points this month, the most for a benchmark of that maturity since December 2008.