Currency Malaysian ringgit falls to 10-year low on Fitch review, Greece

by **Cals** Mon 29 Jun 2015, 20:53

Currency
Malaysian ringgit falls to 10-year low on Fitch review, Greece

(June 29): The ringgit fell to a decade-low as Fitch Ratings decides whether or not to downgrade Malaysia and Greece’s potential exit from the euro spurs demand for dollars.
Fitch, which ranks Malaysia at A- with a negative outlook, the fourth-lowest investment grade, will review its assessment before the end of June, Andrew Colquhoun, head of Asia Pacific sovereign ratings in Hong Kong, said last week. The country is “more than 50 percent likely” to be downgraded, he said in March. Greece imposed capital controls and shut lenders Monday to avert the collapse of its financial system.
“Concern’s over Fitch’s action continues to weigh on sentiment,” said Saktiandi Supaat, head of foreign-exchange research at Malayan Banking Bhd. ([You must be registered and logged in to see this image.] Financial Dashboard) in Singapore. “The external risk-off environment sparked by Greece also doesn’t help.”
The ringgit dropped 0.4 percent to 3.7843 a dollar in Kuala Lumpur, data compiled by Bloomberg show. It fell to 3.7887 earlier, the weakest since July 2005, and has lost 7.6 percent this year in Asia’s worst performance.
Fitch’s Colquhoun cited Malaysia’s worsening trade balance and concern about the ability of 1Malaysia Development Bhd., a state investment company, to meet its debt obligations, when he warned of a downgrade in March. Exports fell 9.1 percent in May from a year earlier, following an 8.8 percent decline in April, according to aBloomberg survey before data on Friday.
Malaysia’s government bonds fell. The yield on the five- year notes rose four basis points to 3.67 percent, while that on the 10-year securities climbed three basis points to 4.07 percent, according to data compiled byBloomberg.