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Ringgit extends gains as oil rebound brightens outlook

Malaysia’s ringgit strengthened the most in more than a week as brent crude rallied overnight to above US$50 a barrel, brightening the outlook for Asia’s only major net oil exporter.

The ringgit gained along with other regional currencies on Wednesday as the Standard & Poor’s 500 Index of US stocks climbed toward its record reached in May, with the positive sentiment rubbing off on Asian benchmarks. Brent crude has struggled to maintain any advance above US$50 and is still down by more than half from its 2014 peak, helping make Malaysia’s currency one of the worst performing this year in emerging markets.

The ringgit strengthened 0.5 percent to 4.2638 a dollar as of 9.12am in Kuala Lumpur, the most since Oct 23, according to prices from local banks compiled by Bloomberg before the central bank meets to decide on its overnight policy rate on Thursday and Friday’s export data. It gained 0.4 percent yesterday.

“Higher oil prices and positive risk sentiment resulting from higher US equities fueled the ringgit’s gains,” said Sim Moh Siong, a foreign-exchange strategist at Bank of Singapore Ltd. “I don’t think the OPR or export data will significantly drive the currency’s direction. ”

Policy makers will keep the benchmark rate at 3.25 percent, according to all 20 economists surveyed by Bloomberg, while exports likely increased for a fourth month in September.

- Bloomberg

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