Ringgit Takes A Beating As Crude Oil Sinks Back To No Man’s Land
The ringgit led a decline in Asian currencies as slumping oil prices dim the prospects for Malaysia’s export earnings.
Brent crude sank 0.8 percent to close at its lowest level in four months on Monday, while U.S. oil slid into a bear market amid renewed concern there is a global supply glut. Malaysia loses 450 million ringgit ($111 million) in annual income for every $1 drop in oil and the nation derives about a fifth of its revenue from energy-related sources.
“The wider story is the oil price slippage for the past few weeks,” said Vishnu Varathan, a senior economist at Mizuho Bank Ltd. in Singapore. “In Malaysia’s case, oil has the most pronounced effect so that’s keeping the ringgit in check.”
The ringgit weakened 0.5 percent to 4.07 per dollar as of 10:41 a.m. in Kuala Lumpur.
It has lost 1.2 percent in the past month, the worst performance among Asian currencies.