KUALA LUMPUR - Malaysia's ringgit fell the most in two months on Monday (April 18) as crude prices plunged after major oil producers failed to come up with an agreement to freeze output and address a supply glut.
The ringgit led emerging-market losses in early Asian trading. It fell 1.2 per cent to 3.9538 per US dollar as of 8:23 am in Kuala Lumpur, the steepest loss since Feb 17, according to prices from local banks compiled by Bloomberg. The currency has climbed 9 per cent this year, trailing a more than 11 percent advance in the yen.
Against the Singapore dollar, the ringgit also tumbled, falling 1 per cent to 2.9040 per Singdollar as of 11:06 am from its close on Friday of 2.8744.
The disappointment stemming from the weekend meeting in Doha risks halting a rally in Asia's best-performing currency this year after the yen as a renewed decline in the commodity puts pressure on government finances for oil-exporting Malaysia.
Brent crude tumbled more than 5 per cent to US$40.93 a barrel as Iran appeared to be the main stumbling block to an agreement. Hopes a deal would be reached had spurred gains across world markets in recent days and driven Brent above US$44 for the first time since December.
"The ringgit's near-term fortunes are heavily tied to oil- price developments," said Khoon Goh, a senior currency strategist at Australia & New Zealand Banking Group Ltd. in Singapore. "It really depends on whether oil prices can stabilize or continue to fall."