SINGAPORE (BLOOMBERG) - Malaysia's ringgit led losses early in Asia as a renewed decline in stocks and a downgrade in Brazil's credit rating reignited concerns capital will flow out of emerging markets as the US prepares to raise interest rates.

The ringgit fell below the 3.07 level to one Singapore dollar, for the first time, on Thursday morning (Sept 10), touching 3.0788 at 8:12 am. It was trading at 3.0698 as of 8:37 am, down from Wednesday's close of 3.0590.

The Malaysian currency also sank to a new 1998 low against the US dollar. It was down 1.1 per cent to 4.3770 per US dollar as of 8:13 am in Kuala Lumpur, the lowest level since January 1998, according to prices from local banks compiled by Bloomberg.

"The drop in US equities, the rate cut by the Reserve Bank of New Zealand and cutting Brazil's rating to junk should push emerging markets down," said Masashi Murata, vice president at Brown Brothers Harriman & Co. in Tokyo. "All Asian currencies are likely to drop with risk-off trading."