The ringgit fell to a three-month low as concern about the extent of China’s slowdown triggered a selloff in emerging-market assets, including Malaysian stocks and bonds.
A slump in Brent crude to the lowest level in more than 11 years didn’t help the ringgit either as it damps the outlook for Asia’s only major net oil exporter. The yuan extended losses after China cut its daily fixing by the most since August, adding to speculation the central bank is favoring depreciation to revive the economy. That drove a measure of developing-nation currencies to the weakest since 1993.
“The unstable China economy and markets are the main drivers for risk-off,” said Masashi Murata, vice president at Brown Brothers Harriman & Co. in Tokyo. “Lower oil prices lead to a weak ringgit too.”
The ringgit declined 0.7 percent to 4.4225 a dollar as of 10:16 a.m. in Kuala Lumpur and earlier fell to 4.4285, the lowest since Oct. 2, according to prices from local banks compiled by Bloomberg. The currency has weakened 2.9 percent this year, after rounding off its worst annual loss since 1997. The FTSE Bursa Malaysia KLCI Index dropped 0.6 percent, snapping a two-day gain.
Chinese stocks ceased trading for the day after the CSI 300 index fell by more than 7 percent, triggering a new circuit breaker imposed this week. The MSCI Emerging-Markets Index decreased 1.6 percent to its lowest level since 2009.
Malaysia reports November exports data on Thursday and shipments likely rose 12 percent from a year earlier, according to the median estimate in a Bloomberg survey. That follows a 16.7 percent advance in October. The trade surplus is forecast to narrow to 12 billion ringgit ($2.7 billion) from 12.16 billion ringgit. Foreign-exchange reserve figures also come out later Thursday.
The yield on the Southeast Asian nation’s 10-year government debt rose two basis points to 4.23 percent and that for notes due in 2019 climbed three basis points, prices from Bursa Malaysia show.
