Ringgit Sentiment Continues to Sour

November 22, 2016 Share Print 0

The ringgit fell as much as 0.5 percent to the lowest in more than 13 months after Bank Negara Malaysia warned foreign banks this month against using offshore forwards to bet against the currency. A three-day rally in Brent crude offered limited support for the ringgit even as it boosted prospects for Malaysia’s oil-export earnings.

“The Malaysian ringgit’s in a world of its own simply because of the currency regulations that Bank Negara Malaysia’s coming out with,” said Stephen Innes, a senior trader at Oanda Asia Pacific Pte Ltd. in Singapore. “Right now, people are still looking for the exits on the bond market simply because there’s a growing fear that they just can’t hedge their risk.”

The 10-year yield rose three basis points to end at 4.40 percent, the highest for a similar-maturity benchmark since August 2015. The ringgit reached 4.4420 per dollar, the weakest since Oct. 2, 2015, before trading 0.1 percent higher at 4.4175 as of 5:44 p.m. in Kuala Lumpur. One-month non-deliverable forwards rose 0.1 percent to 4.4250.

Bloomberg

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Stephen Innes

Head of Trading APAC at OANDA

Stephen has over 25 years of experience in the financial markets and currently based in Singapore as the Head of Trading Asia Pacific with OANDA. Stephen's market views focus on the movement of G-10 and ASEAN Currencies. His views appear in Bloomberg, CNBC.Reuters, New York Times WSJ and the Economist. His media appearances include Bloomberg TV & Radio, BBC International, Sky TV, Channel News Asia, ASTRO AWANI and BFM Malaysia. Stephen has an extensive trading experience in Spot and Forward FX, Currency and Interest Rate Futures, Money Market Derivatives and Precious Metals. Before joining OANDA, he worked with organisations like Nat West, Chemical Bank, Garvin Guy Butler, and Sumitomo Mitsui Banking Corporation. Stephen was born in Glasgow, Scotland, and holds a Degree in Economics from the University of Western Ontario.