Ringgit Gains as Central Bank Signals Tolerance on Appreciation
August 25, 2010, 5:11 AM EDT
By David Yong
Aug. 25 (Bloomberg) -- Malaysia’s ringgit gained on speculation the central bank will tolerate currency appreciation as growth in Asian economies accelerates.
Bank Negara Malaysia Governor Zeti Akhtar Aziz said yesterday the currency’s 9.1 percent rally this year reflects domestic and regional economic fundamentals, reiterating comments from the government after the ringgit climbed to a 13- year high this week. Government bonds were little changed before a 3 billion ringgit ($955 million) debt auction tomorrow.
“The domestic economy is resilient and there’s a view that the authorities are comfortable with the ringgit levels,” said Azmi Shukri Rahman, a foreign-exchange trader at CIMB Investment Bank Bhd. in Kuala Lumpur. “Stock losses could be a short-term drag but the big picture is still for a lower dollar-ringgit.”
The ringgit strengthened 0.3 percent to 3.1405 against the U.S. currency as of 5 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. It reached 3.1238 on Aug. 23, the strongest level since October 1997.
Malaysia’s currency has remained buoyant on the back of strong fundamentals and foreign-exchange liberalization measures, Standard Chartered Plc said in a report yesterday.
The ringgit extended gains and stocks pared losses after an Ifo Institute report showed business confidence in Germany, Europe’s largest economy, rose to a three-year high, easing concern about slowing global growth. U.S. home sales plunged by a record last month, a private report yesterday showed.
Malaysia’s government will auction 2015 notes tomorrow in a so-called reopening. Traders offered to buy the securities at 3.25 percent, according to bid prices at Amanah Butler Sdn., the nation’s biggest money broker.
The yield on the existing 3.835 percent debt held at 3.24 percent, according to Bursa Malaysia. The rate has declined 28 basis points this quarter and is now at the lowest level for a five-year benchmark since February 2009.
August 25, 2010, 5:11 AM EDT
By David Yong
Aug. 25 (Bloomberg) -- Malaysia’s ringgit gained on speculation the central bank will tolerate currency appreciation as growth in Asian economies accelerates.
Bank Negara Malaysia Governor Zeti Akhtar Aziz said yesterday the currency’s 9.1 percent rally this year reflects domestic and regional economic fundamentals, reiterating comments from the government after the ringgit climbed to a 13- year high this week. Government bonds were little changed before a 3 billion ringgit ($955 million) debt auction tomorrow.
“The domestic economy is resilient and there’s a view that the authorities are comfortable with the ringgit levels,” said Azmi Shukri Rahman, a foreign-exchange trader at CIMB Investment Bank Bhd. in Kuala Lumpur. “Stock losses could be a short-term drag but the big picture is still for a lower dollar-ringgit.”
The ringgit strengthened 0.3 percent to 3.1405 against the U.S. currency as of 5 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. It reached 3.1238 on Aug. 23, the strongest level since October 1997.
Malaysia’s currency has remained buoyant on the back of strong fundamentals and foreign-exchange liberalization measures, Standard Chartered Plc said in a report yesterday.
The ringgit extended gains and stocks pared losses after an Ifo Institute report showed business confidence in Germany, Europe’s largest economy, rose to a three-year high, easing concern about slowing global growth. U.S. home sales plunged by a record last month, a private report yesterday showed.
Malaysia’s government will auction 2015 notes tomorrow in a so-called reopening. Traders offered to buy the securities at 3.25 percent, according to bid prices at Amanah Butler Sdn., the nation’s biggest money broker.
The yield on the existing 3.835 percent debt held at 3.24 percent, according to Bursa Malaysia. The rate has declined 28 basis points this quarter and is now at the lowest level for a five-year benchmark since February 2009.