Ringgit rebounds from 10-year low

Malaysian ringgit banknotes.
Malaysian ringgit banknotes.PHOTO: AFP

KUALA LUMPUR • The ringgit rebounded from a 10-year low after Bank Negara Malaysia governor Zeti Akhtar Aziz said its weakness is not sustainable.

The currency snapped a five-day decline after she said the exchange rate reflected market sentiment and not underlying economic fundamentals and that the nation has "moved on" from emergency measures.

Asian stocks rose, halting a four-day drop fuelled by concern that Greece will leave the euro.

Data compiled by Bloomberg showed the ringgit strengthened 0.2 per cent to 3.7780 a US dollar as of 10am. It fell 1.4 per cent over the previous five days and reached 3.7887 on Monday, the weakest since July 2005.

"Zeti's statement is reassuring but not new," said Mr Sim Moh Siong, a foreign exchange strategist at Bank of Singapore.

"The currency is probably also benefiting from the contained financial contagion from the developments in Greece."

The prospect of a rating downgrade for Malaysia has been weighing on the ringgit, which had fallen 2.9 per cent last month in Asia's worst performance.

Fitch Ratings warned in March that the ranking was "more than 50 per cent likely" to be cut.

Exports fell 9.1 per cent in May from a year earlier, following an 8.8 per cent decline in April, according to a Bloomberg survey.

Government bonds dropped. The yield on the three-year notes rose two basis points to 3.23 per cent, while the 10-year yield increased one basis point to 4.09 per cent, according to data compiled by Bloomberg.

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A version of this article appeared in the print edition of The Straits Times on July 01, 2015, with the headline 'Ringgit rebounds from 10-year low'. Print Edition | Subscribe