You are here
Ringgit declines most in two weeks on lower oil, Brexit risk
[KUALA LUMPUR] Malaysia's ringgit fell by the most this month, as oil prices retreated and the prospect of the UK leaving the European Union fueled demand for haven assets.
Brent crude extended declines to a third session on Monday after recording its steepest fall in a month on Friday, weighing on the outlook for Malaysia, which derives about a fifth of government revenue from energy-related sources. A gauge of the dollar held a gain from last week as polls ahead of the June 23 referendum showed those backing a British exit from the EU are almost evenly split with those who favour staying.
"In the last New York session, the dollar rose against most emerging markets on fear of the Brexit risk," said Masashi Murata, a vice president at Brown Brothers Harriman & Co in Tokyo.
"The oil price dropped on that as well, which leads to a weaker ringgit." The ringgit depreciated as much as 0.9 per cent, the biggest drop since May 30, before trading 0.8 per cent weaker at 4.1040 per dollar as of 9:30 am in Kuala Lumpur, according to prices from local banks compiled by Bloomberg.
A report due Wednesday is forecast to show Malaysian consumer prices rose 2 per cent in May from a year earlier, the slowest pace since April last year, according to the median estimate of economists in a Bloomberg survey.