Ringgit gains on oil rebound and better-than-expected trade data

The currency appreciated 2.5 per cent to 3.5452 per US dollar as of 9am in Kuala Lumpur in a shortened trading week due to holidays Monday and Tuesday. -- PHOTO: BLOOMBERG
The currency appreciated 2.5 per cent to 3.5452 per US dollar as of 9am in Kuala Lumpur in a shortened trading week due to holidays Monday and Tuesday. -- PHOTO: BLOOMBERG

KUALA LUMPUR (Bloomberg) - Malaysia's ringgit rebounded following a two-week loss as a recovery in crude prices eased concern that finances will deteriorate in the oil-exporting nation.

The currency appreciated 2.5 per cent to 3.5452 per US dollar as of 9 a.m. in Kuala Lumpur in a shortened trading week due to holidays Monday and Tuesday, data compiled by Bloomberg show. That's the biggest gain since September 2013.

Trade data this week that beat economists' estimates helped boost sentiment for the ringgit, which has dropped 9 per cent in six months amid a slide in Brent crude, crimping revenue for Asia's only major oil exporter. The government last month revised its 2015 budget deficit target higher and cut the economic growth forecast because of the impact from oil.

"The ringgit has rallied on the back of a recovery in oil prices," said Khoon Goh, a strategist at Australia & New Zealand Banking Group Ltd. in Singapore. "There's reduced concern over Malaysia's external balances after yesterday's better-than-expected trade surplus number."

Malaysia's exports increased 2.7 per cent in December from a year earlier, more than a 2.1 per cent increase in November, according to a report Thursday from the Department of Statistics. The trade surplus narrowed to RM9.2 billion from RM11.1 billion. Both exceeded the median estimates in Bloomberg surveys of 1 per cent and RM9 billion, respectively.

Foreign-exchange reserves data for the two weeks to Jan. 30 are due later today, while the government will report fourth quarter and full-year growth figures next Thursday.