Ringgit slumps to 10-year low amidst Greek crisis

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KUALA LUMPUR: The ringgit fell to a 10-year low yesterday as investors weighed on whether Fitch Ratings would downgrade Malaysia on the back of a worsening situation in Greece deterred risk-taking.

According to Bloomberg data, the ringgit dropped 0.4 per cent to 3.7830 a dollar in Kuala Lumpur. During the day, it fell to a low of 3.7843 which is the weakest in ten years since July 2005.

The ringgit has lost 7.5 per cent this year in Asia’s worst performance, the Bloomberg report said.

Meanwhile, the MSCI Asia Pacific Index declined for a fourth day as Greece imposed capital controls and shut lenders to avert the collapse of its financial system. Fitch, which ranks Malaysia at A – with a negative outlook which is the fourth-lowest investment grade, is said to review its assessment before the end of June.

Bloomberg quoted Andrew Colquhoun, head of Asia Pacific sovereign ratings in Hong Kong, previously saying the country is “more than 50 per cent likely” to be downgraded.

Exports fell 9 per cent in May from a year earlier, following a 8.8 per cent decline in April, according to a Bloomberg survey before data due July 3.

Malaysia’s government bonds fell as the yield on the five-year notes rose two basis points to 3.65 per cent, while that on the 10-year securities was steady at 4.04 per cent, according to Bloonmberg data.