KUALA LUMPUR (Bloomberg) - Malaysia's ringgit gained the most since September 2013 as a rally in the price of oil eased concern the nation's finances will deteriorate.
The currency climbed 1.8 per cent from Jan. 30 to 3.5652 per US dollar as of 9:06 a.m. in Kuala Lumpur as markets reopened after holidays on Monday and Tuesday, according to prices from local banks. Brent crude jumped 5.8 per cent on Tuesday and has increased 19 per cent in four days to $57.91 a barrel.
The price of the commodity had fallen to as low as US$45.19 on Jan. 13, the least since 2009, causing the government to revise its 2015 fiscal deficit target to 3.2 per cent of gross domestic product from 3 per cent. Prime Minister Najib Razak has reduced this year's growth forecast to 4.5 per cent to 5.5 per cent from as much as 6 per cent. Malaysia is Asia's only major net exporter of oil.
"The main factor driving the ringgit has been the 19 per cent rebound in oil prices over the past four or five trading sessions," said Jonathan Cavenagh, a currency strategist at Westpac Banking Corp. in Singapore. "It's more about people exiting long-dollar positions. For the outlook to turn more positive on the ringgit, you need to see oil prices continue to improve from here."