Ringgit falls amid global stock selloff on China growth outlook

Posted by Trading Advisor on 7:52 PM with No comments

myr1.jpgThe FTSE Bursa Malaysia KLCI Index of stocks dropped more than one per cent Wednesday, raising concern more foreign investors will exit after dumping about US$3 billion in shares this year. Brent crude tumbled 8.5 per cent Tuesday in its biggest one-day slide since 2011 before data forecast to show US stockpiles increased. The price of the commodity has halved in the past year, cutting Malaysia's export earnings and contributing to a 24 per cent slump in the ringgit. A report on Tuesday showed China's official factory gauge fell to a three-year low last month.

[KUALA LUMPUR] Malaysia's ringgit fell the most in a week amid a global selloff in equities and as energy prices slumped on signs China's economy is slowing.

An overnight drop in emerging-market currencies and a retreat in Brent "should see Asia falling back in line with the rest of the world where risk appetite remains impaired," said Nizam Idris, the Singapore-based head of foreign-exchange and fixed-income strategy at Macquarie Bank Ltd.

"Oil has been volatile." The ringgit weakened 1.4 per cent to 4.2227 a dollar as of 10:08 am in Kuala Lumpur, the steepest decline in Asia, according to prices from local banks compiled by Bloomberg. It reached a 17-year low of 4.2990 on Aug 26.