KUALA LUMPUR (BLOOMBERG) - Malaysia's ringgit fell to the lowest in more than two months on Tuesday (Sept 13) as a decline in oil prices and a controversy involving a troubled state fund damped demand for the nation's assets.
The ringgit retreated 0.6 per cent to 4.0945 per US dollar as of 9.19am in Kuala Lumpur and reached 4.0975, the weakest since June 28, according to prices from local banks compiled by Bloomberg.
Against the Singapore dollar, the ringgit fell 1.15 per cent to 3.0206 per Singdollar as at 10am, from its close on Friday of 2.9862.
The currency weakened as domestic financial markets reopened after a holiday on Monday even as Asian peers including the South Korean won climbed following comments from Federal Reserve governor Lael Brainard that damped speculation US interest rates will rise this month.
Brent crude dropped 0.7 per cent on Tuesday, erasing a gain on Monday and adding to the pressure on the ringgit.
Malaysia meanwhile said it's confident of winning in an arbitration hearing where state investment company 1Malaysia Development Bhd is facing a claim for US$6.5 billion (S$8.82 billion) from Abu Dhabi's sovereign wealth fund.
"The ringgit is getting no joy from the oil markets right now," said Mr Stephen Innes, a senior trader at Oanda Asia Pacific Pte in Singapore. "The 1MDB political risk is still at the forefront."
1MDB and International Petroleum Investment Co PJSC are locked in a tussle that spilled over to repayments on bonds issued by the Malaysian company. 1MDB and its sole shareholder - Malaysia's Ministry of Finance - haven't performed their obligations towards IPIC, the Abu Dhabi fund said in a London stock exchange filing in June.