Ringgit leads gains in Asian currencies as crude extends rally

Malaysia's ringgit rose, leading gains in Asia, as a rally in crude prices eased concern that falling revenue will harm the oil-exporting nation. -- PHOTO: BLOOMBERG
Malaysia's ringgit rose, leading gains in Asia, as a rally in crude prices eased concern that falling revenue will harm the oil-exporting nation. -- PHOTO: BLOOMBERG

KUALA LUMPUR (Bloomberg) - Malaysia's ringgit rose, leading gains in Asia, as a rally in crude prices eased concern that falling revenue will harm the oil-exporting nation.

Brent crude has advanced 2 per cent this week, taking its increase this year to 18 per cent. That's improved the outlook for the finances of a government that derives around 30 per cent of its revenue from oil. The ringgit is still Asia's worst performer in the past six months, dropping 7.1 per cent as doubts a state investment company can repay its debts raised concern the country could have its credit rating downgraded.

"The ringgit is tracking oil's gains," said Christopher Wong, a Singapore-based senior currency analyst at Malayan Banking Bhd. "Concern about the impact of the risk of a sovereign rating downgrade are slowly dissipating although we are still flagging it as a risk."

The ringgit strengthened 0.6 per cent to 3.5910 a US dollar as of 9:17 a.m. in Kuala Lumpur, data compiled by Bloomberg show. That took its gain over the past month to 1.1 per cent.

Fitch Ratings is more likely than not to cut Malaysia's rating due to a worsening trade surplus and concern 1Malaysia Development Bhd. won't be able to pay its debts, Andrew Colquhoun, head of Asia Pacific sovereign ratings in Hong Kong, said in a March 18 interview. Fitch rates the nation A-, the fourth-lowest investment grade.

Malaysian government bonds fell, pushing the yield on the notes due September 2025 up one basis point, or 0.01 percentage point, to 3.86 per cent, data compiled by Bloomberg show.