`


THERE IS NO GOD EXCEPT ALLAH
read:
MALAYSIA Tanah Tumpah Darahku

LOVE MALAYSIA!!!


 


Friday, August 7, 2015

Ringgit leads Asia declines as reserves seen below US$100 billion

A slump in Brent crude, a political scandal involving Prime Minister Datuk Seri Najib Razak and the prospect of higher US interest rates have combined to weaken the ringgit by 10.6% versus the dollar this year. – The Malaysian Insider file pic, August 7, 2015.A slump in Brent crude, a political scandal involving Prime Minister Datuk Seri Najib Razak and the prospect of higher US interest rates have combined to weaken the ringgit by 10.6% versus the dollar this year. – The Malaysian Insider file pic, August 7, 2015.The ringgit led losses in Asia on speculation Malaysia’s foreign-exchange reserves dropped below US$100 billion (RM390.75 billion) in July for the first time since 2010.
The holdings slid 13% this year to $100.5 billion as of July 15, fuelling speculation Bank Negara Malaysia intervened to halt the currency’s slide to its weakest level since 1998.
Macquarie Bank Ltd predicts data on Friday will show the reserves sank to US$96.5 billion by the end of last week and Societe Generale SA said it expects the central bank to stop defending the exchange rate at about the US$90 billion mark.
“The market is probably getting nervous because reserves are expected to fall below the psychological US$100 billion mark,” said Nizam Idris, the Singapore-based head of foreign-exchange and fixed-income strategy at Macquarie Bank, the second-most accurate forecaster for the ringgit in the four quarters to June.
The currency weakened 0.6% to close at 3.9023 a dollar in Kuala Lumpur, prices from local banks compiled by Bloomberg show. That’s the lowest since September 1998 when it reached 3.9340. The 14-day relative-strength index of the dollar versus the ringgit climbed to 82, holding above 70 for a fourth day, a level that signals the US currency may be poised to reverse direction.
Societe Generale cut its third-quarter ringgit forecast to 4.10 from 3.80, and the year-end estimate to 3.90 from 3.70, strategists Jason Daw and Frances Cheung wrote in a report Thursday. The central bank is unlikely to try to protect a level of 4 per dollar after failing to defend 3.8 in July, the level it was pegged at in 1998, the analysts said.
A slump in Brent crude, a political scandal involving Prime Minister Datuk Seri Najib Razak and the prospect of higher US interest rates have combined to weaken the ringgit by 10.6% versus the dollar this year.
Bonds fall
The nation's US$100.5 billion reserves are enough to finance 7.9 months of retained imports and are 1.1 times short-term external debt, according to a central bank statement issued when the figure was released on July 23.
While the import-cover ratio has fallen over the years, it remains well above the generally accepted benchmark of three months, the Societe Generale strategists wrote.
Malaysia’s 10-year government bonds declined, with the yield rising seven basis points to 4.14%, according to Bursa Malaysia prices. That’s the highest level since June 8 and the biggest increase in two months. – Bloomberg

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.