Ringgit: Plunging to new lows

This is not good news.Read this Bloomberg report.

Malaysia’s ringgit fell, poised for its biggest drop in 12 years, after investors sold regional stocks as a weaker-than-estimated US jobs report renewed concerns about the pace of the global economic recovery.

The currency halted a two-week gain as regional equities tumbled, crude-oil prices dropped and the 16-nation euro reached the lowest level since March 2006. US payrolls and Malaysia’s exports increased at a slower pace than economists predicted, reports on June 4 showed. Factory output in Malaysia may have eased in April as overseas shipments slowed, a government report this week is forecast to show. Bonds dropped as the government prepares to sell debt after a pause in May.

“Investors wanted to see a quicker recovery, and the data shows it will take a few years rather than months,” said Calbert Loh, head of treasury at Bangkok Bank Bhd in Kuala Lumpur. “If stocks plunge, the ringgit and regional currencies will likely suffer too.”

The ringgit weakened 1.7 per cent to 3.3325 as of 5:13 pm in Kuala Lumpur, according to data compiled by Bloomberg, the biggest drop since June 1998. The currency has declined 2.1 per cent this month, adding to a 2.4 per cent slide in May. The MSCI Asia-Pacific Index of regional shares dropped 3.3 per cent.

Industrial production probably rose 12.4 per cent, versus a 14.1 per cent gain in March, according to a Bloomberg News survey before a statistics department report on June 10. Exports gained 26.6 percent in April from a year earlier, versus 36.4 per cent in March.