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Ringgit rises sixth day as oil surges on potential output freeze
[KUALA LUMPUR] Malaysia's ringgit rose for a sixth day as Brent crude climbed to the highest in four months on optimism major oil producers will agree to a production freeze at a meeting in Doha this weekend.
The currency led gains in Asia as such an outcome may help sustain a rebound in the commodity from a 12-year low reached in January and bolster finances for Malaysia, the region's only major net oil exporter. Russia sees a deal on freezing oil output as possible regardless of Iran's stance after talks with Saudi Arabia, said Dmitry Peskov, the Kremlin's press secretary.
The ringgit was supported by "continued unwinding of dollar-longs and supported by oil prices on hopes of a freeze at Doha," said Christopher Wong, foreign-exchange strategist at Malayan Banking Bhd in Singapore. "Decent buying of Malaysian government bonds also helped."
The currency rose 0.2 per cent to 3.8720 per dollar in Kuala Lumpur, according to prices from local banks compiled by Bloomberg. It earlier gained as much as 0.9 per cent to 3.8465, the strongest since August.
Brent crude retreated on Wednesday after climbing above US$44 a barrel in New York for the first time since December. It was last down 0.8 per cent at US$44.30 as US industry data showed crude stockpiles expanded, which would exacerbate a global supply glut without an accompanying production freeze by major producers.
Investors boosted holdings of Malaysian government bonds to a record in March, the latest central bank figures show. The 10- year yield rose one basis point to 3.76 per cent after dropping on Tuesday to a 14-month low.