Malaysia’s ringgit completed its worst week since June as concern a slowdown in China will deepen, dimmed the Southeast Asian nation’s export outlook.
The ringgit erased earlier gains, in tandem with other regional currencies, amid fading expectations that the Federal Reserve will boost asset purchases. A government report yesterday showed foreign investment in China, Malaysia’s biggest export market in June, fell 8.7 percent in July from a year earlier to $7.58 billion, the smallest inflow since July 2010.
“A slowdown in China will have a negative impact on Malaysia’s economic growth,” said Lam Chee Mun, a fund manager at TA Investment Management Bhd. in Kuala Lumpur. “The flight to safety will further strengthen the dollar.”
The ringgit decreased 0.1 percent to 3.1340 per dollar as of 6:05 p.m. in Kuala Lumpur, according to data compiled by Bloomberg. It dropped 0.4 percent this week, the most since June.
One-month implied volatility, a measure of exchange-rate swings used to price options, was steady at 6.7 percent. It climbed 40 basis points, or 0.4 percentage point, for the week.
Malaysia’s five-year bonds fell this week, with the yield on the 3.314 percent notes due October 2017 rising 11 basis points to 3.34 percent, according to Bursa Malaysia. The rate fell four basis points today.