The ringgit gained for a second day on optimism Malaysia’s plan to abolish energy subsidies will help shore up public finances.
The currency completed the biggest two-day advance in a month after the government announced November 21 that it will remove fuel subsidies from December 1. The ringgit also rose on speculation Malaysia, a net oil exporter, will benefit from a rebound in crude prices from a four-year low.
“Abolition of fuel subsidies and the likely stabilization of oil prices are ringgit-positive,” said Sim Moh Siong, a currency strategist at Bank of Singapore Ltd. “We expect the ringgit to strengthen further in the near term.”
Malaysia’s currency climbed 0.1 per cent to 3.3520 per dollar in Kuala Lumpur, according to data compiled by Bloomberg show. It strengthened 0.4 per cent in the past two days.
Brent crude gained 1.2 per cent last week, curbing this quarter’s decline to 15 per cent. Oil-related industries account for 30 per cent of Malaysia’s government revenue. Consumer prices in the Southeast Asian nation gained 2.8 per cent in October from a year earlier, compared with 2.6 per cent in the previous month, official data released on November 21 showed. That was less than the median three per cent estimated by economists in a Bloomberg survey.
Ten-year government bonds rose, with the yield on the 4.181 per cent notes maturing in July 2024 falling one basis point, or 0.01 percentage point, to 3.89 per cent, according to data compiled by Bloomberg.-- Bloomberg