KUALA LUMPUR: 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% to close at its lowest level in four months on Monday, while US oil slid into a bear market amid renewed concern there is a global supply glut.
Malaysia loses RM450mil (US$111mil) in annual income for every US$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% to 4.0415 per dollar as of 8:41 am in Kuala Lumpur, according to prices from local banks compiled by Bloomberg.
It has lost 1.1% in the past month, the worst performance among Asian currencies. – Bloomberg