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[KUALA LUMPUR] The ringgit halted a three-day drop on the prospect of more European Central Bank stimulus that will spur fund flows to emerging markets.
Malaysia's benchmark share index gained along with regional stocks before a meeting in Frankfurt on Wednesday at which the ECB is expected to ease monetary policy to bolster economic growth.
Ten-year ringgit sovereign debt yields 4.19 per cent, compared with 0.47 per cent for German bunds.
"There's improved sentiment ahead of the ECB policy move," said Saktiandi Supaat, head of foreign-exchange research at Malayan Banking Bhd in Singapore. "There'll be more money moving around that'll be looking for higher returns and yields."
The ringgit strengthened 0.3 per cent to 4.2495 a dollar as of 10.50am in Kuala Lumpur after rising as much as 0.6 per cent earlier, according to prices from local banks compiled by Bloomberg.
The currency climbed 0.8 per cent last month, the only Asian gainer, but is down 18 per cent this year in the region's worst performance.
Government bonds fell, pushing the yield on the notes due October 2020 up one basis point to 3.72 per cent, according to prices from Bursa Malaysia.