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Ringgit extends July slump as oil falls, 1MDB returns to focus

Wednesday, July 27, 2016 - 15:00
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Malaysia's ringgit extended its loss this month, the biggest among emerging Asian currencies, as oil resumed declines and a troubled state investment fund weighed on sentiment.

[KUALA LUMPUR] Malaysia's ringgit extended its loss this month, the biggest among emerging Asian currencies, as oil resumed declines and a troubled state investment fund weighed on sentiment.

The ringgit fell for the seventh time in eight days as Brent crude slipped toward a two-month low set this week, hurting Malaysia which is an oil exporter.

The government will work with any parties investigating 1Malaysia Development Bhd, Second Finance Minister Johari Abdul Ghani said Tuesday after US and Singapore said they're taking action against alleged fraud involving the company.

The Federal Open Market Committee ends a two-day meeting Wednesday. Malaysia's bonds fell.

"This lingering issue with 1MDB is just weighing on global sentiment," said Stephen Innes, a senior trader at Oanda Asia Pacific Pte Ltd in Singapore.

"I'm still looking at the Malaysian ringgit positively for a longer-term play but in this short term, the FOMC and oil prices are driving concerns."

The ringgit dropped 0.3 per cent to 4.0740 per dollar as of 2:08 pm in Kuala Lumpur, taking its decline this month to 1.1 per cent. The currency slid to 4.0920 on Monday, the weakest level since June 28.

1MDB said on Tuesday its auditor Deloitte LLP had resigned and its audited financial statements for 2013 and 2014 shouldn't be relied on.

Malaysia's 10-year bond yield climbed 11 basis points to 3.62 per cent, and the five-year yield rose two basis points to 3.25 per cent, according to prices from Bursa Malaysia.

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