Malaysia’s ringgit fell the most in almost three weeks after Federal Reserve vice-chairperson Stanley Fischer said a US interest-rate increase is still on the cards this year even as futures appear to rule out such a move.

The currency retreated following last week’s biggest five- day gain since 1998. The seven-day relative-strength index for the dollar fell to 21 on Oct 9, below the key technical level of 30 that signals to some traders the greenback was poised for a reversal.

Malaysia’s economic growth faces greater risks from a global slowdown than inflation, and borrowing costs at current levels are supportive, central bank governor Zeti Akhtar Aziz said in an interview in Lima, Peru on Sunday.

“The ringgit gained a lot last week so there could be a pullback here given that the market thinks the Fed is still looking at hiking rates this year,” said Irene Cheung, a currency strategist at Australia & New Zealand Banking Group Ltd in Singapore. “A lot depends on oil prices going forward.”

The currency weakened 1.1 percent to 4.1765 a dollar as of 9.46 am in Kuala Lumpur, according to prices from local banks compiled by Bloomberg. The ringgit has lost 16 percent this year, a performance that trails only the Brazilian real, Turkish lira and Colombian peso among 24 emerging markets tracked by Bloomberg as a slump in Brent crude cuts earnings for Asia’s only major net oil exporter.

The US economy may be strong enough to merit a rate increase by year-end, although policy makers are monitoring slower jobs growth and international developments in deciding the precise timing, said Fischer. Futures contracts show the odds of such a move in 2015 have fallen to below 50 percent after data on Oct 2 showed American employers took on 142,000 workers last month, below the median estimate of economists in a Bloomberg survey for a 200,000 gain.

A report from the Malaysian government at noon local time today will show industrial production advanced 4.1 percent in August from a year earlier, compared with a 6.1 percent increase the previous month, according to forecasts in a Bloomberg survey.

While global funds bought a net RM783 million of the nation’s shares last week, outflows this year still stand at RM17.6 billion, surpassing the RM6.9 billion sold for all of 2014, MIDF Amanah Investment Bank said in a report today.

Sovereign bonds dropped, with the 10-year yield rising three basis points to 4.14 percent, prices from Bursa Malaysia show.

- Bloomberg