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Ringgit rises to one-month high as oil recovery helps finances
[KUALA LUMPUR] Malaysia's ringgit rose to the highest in more than a month as Brent crude extended its recovery, brightening prospects for the oil-exporting nation.
The currency climbed 1.1 per cent to 4.2015 a dollar as of 8:45 am in Kuala Lumpur, taking its two-day gain to 2.4 per cent, prices from banks compiled by Bloomberg show. While Brent has rallied for five straight days, it is still down 20 per cent this year.
The bounce in oil is helping boost sentiment for the ringgit, which is Asia's worst-performing currency of 2015 due to tumbling commodities prices, slowing growth in China and a potential US interest-rate increase. The exchange rate also got a lift on Tuesday after China General Nuclear Power Corp. agreed to purchase the power assets of state investment company 1Malaysia Development Bhd's for US$2.3 billion. 1MDB is in the process of winding down amid criticism from lawmakers over its rising debt.
"Brent crude is up and that's going to help oil exporters and obviously Malaysia will gain from that," said Nizam Idris, head of foreign-exchange and fixed-income strategy at Macquarie Bank Ltd. in Singapore. "Broad sentiment also improved quite a bit." The Bloomberg-JPMorgan Asia Dollar Index, which tracks the region's 10 most-active currencies excluding the yen, was headed for its highest close in almost three weeks. South Korea's won strengthened 0.7 per cent versus the greenback and the Thai baht advanced 0.3 per cent.