Ringgit hits 9-year high as Fed shows the way

Friday, March 23, 2007

Asian currencies climbed Thursday, with Malaysia's ringgit reaching the highest since February 1998, as the US Federal Reserve dropped its bias toward raising interest rates, encouraging investors to seek higher- yielding assets. US Treasury yields fell as the Fed dropped a reference to "additional firming" at its rate-setting meeting. The outlook for lower global interest rates also boosted Asian stocks, helping send the Singapore dollar to a nine-year high. The ringgit gained 0.2 percent to 3.4685 against the dollar. The Indonesian rupiah climbed 0.4 percent to 9,100 and the Philippine peso rose 0.3 percent to 48.245. The Singapore dollar advanced 0.4 percent to S$1.5175, after reaching S$1.5166, the strongest since September 1997. Lower rates would also widen the premium for holding currencies such as the rupiah, where the key rate is 3.75 percentage points higher than the US benchmark. The ringgit also advanced after the central bank eased capital controls to widen currency market access.

Source: The Standard – China’s Business Newspaper