Ringgit slips to lowest this month

Published: 2009/05/19

RINGGITMALAYSIA'S ringgit yesterday slipped to the lowest level this month as European economic data damped optimism a global recession is abating, prompting investors to favor safer bets than emerging-market assets.

The currency added to last week’s decline after gross domestic product in the 16-member euro region contracted in the first quarter by the most since data began in 1995.Japanese figures due on May 20 are forecast to show a recession deepened in Asia’s largest economy. Malaysia will cut its 2009 economic growth estimate later this month, Bank Negara Malaysia Governor Tan Sri Zeti Akhtar Aziz said on May 11.

“The GDP reports in Europe have been quite bad,” said Tan Voon Ching, a currency trader at OSK Investment Bank Bhd in Kuala Lumpur. “It’s back to risk aversion and people are buying back the dollar a bit.”The ringgit weakened 0.3 per cent to 3.5585 per dollar as of 4.50pm in Kuala Lumpur, according to data compiled by Bloomberg.

It dropped to 3.5750, the lowest since April 30. A week ago, the ringgit reached a four-month high of 3.4965.Gross domestic product in the euro region fell 2.5 per cent in the first quarter from the fourth, the European Union’s statistics office said on May 15.

Japan’s GDP shrank at an annual rate of 16.1 per cent, following a contraction of 12.1 per cent in the final three months of 2008, according to the median estimate of economists in a Bloomberg News survey.Non-deliverable forwards signal traders are betting the ringgit will weaken to 3.5675 in three months, compared with expectations for a rate of 3.5620 on May 15.

Forwards are contracts in which assets are bought and sold at current prices for delivery at a future specified date.INTERBANK RATESSHORT-term rates ended steady yesterday on continued intervention by Bank Negara Malaysia to absorb surplus funds, dealers said.

The overnight rate was quoted at 1.92 per cent while the one-week, two-week and three-week rates were at 1.94 per cent, 1.96 per cent and 1.97 per cent respectively.Liquidity surplus in the conventional system was reduced to RM15.05 billion from RM21.07 billion estimated earlier.For Islamic funds, the liquidity surplus was reduced to RM5 billion from RM8.7 billion estimated earlier.

Bank Negara conducted 10 tenders, comprising four conventional, four Al-Wadiah, one repo and one commodity murabahah programme, in the morning.The central bank also issued a late conventional tender for RM15 billion of one-day money and an Al-Wadiah tender for RM4.9 billion of one-day money.

KLIBORTHE three-month Kuala Lumpur Interbank Offered Rate (KLIBOR) futures contracts on Bursa Malaysia Derivatives ended mixed yesterday.September 2011 and December 2011 were flat at 96.47 and 96.27 respectively while March 2012 went up 21 ticks to 96.09.

Turnover was lower at 190 lots from the 610 lots last Friday while open interest slipped to 41,101 contracts from 41,451 contracts previously.The underlying three-month KLIBOR stood unchanged at 2.12 per cent. The five-year Malaysian Government Securities futures contracts were untraded yesterday. - Agencies