Ringgit drops to 17-year low as falling Brent crude dims outlook

The ringgit weakened to a 17-year low and led declines in Asia as falling oil prices worsened Malaysia's export outlook amid an emerging-market selloff. 

[KUALA LUMPUR] The ringgit weakened to a 17-year low and led declines in Asia as falling oil prices worsened Malaysia's export outlook amid an emerging-market selloff.

The currency has slumped 8.2 per cent this month in the worst developing-nation performance after Russia's ruble. Figures due Friday may show a further decline in Malaysia's foreign-exchange reserves, reducing the central bank's ability to stem the ringgit's descent. The MSCI Emerging Markets Index of shares headed for its lowest close in six years and the FTSE Bursa Malaysia KLCI Index dropped to a three-year low after a private gauge of Chinese manufacturing trailed estimates.

"The decline in commodity prices such as oil and the soft growth in emerging markets such as China is renewing worries over global deflationary pressures," said Sim Moh Siong, a currency strategist at Bank of Singapore Ltd in the city-state. "That's weighing on the ringgit." The currency fell 0.7 per cent on Friday and 2.1 per cent for the week to 4.1667 a dollar as of 11:06 am in Kuala Lumpur. The ringgit dropped to as low as 4.1700 earlier, the weakest since August 1998, and is down 16 per cent this year.