Ringgit slides over renewed 1MDB concerns, falls to 2.94 to the Singdollar

Ringgit slides over renewed 1MDB concerns, falls to 2.94 to the Singdollar

SINGAPORE - Malaysia's ringgit led losses among emerging Asian currencies on Tuesday as crude oil prices resumed their slide and global manufacturing activity remained weak, souring investors' appetite for riskier assets.

The ringgit came under further pressure from renewed concerns over 1Malaysia Development Berhad (1MDB).

Singapore authorities said they had seized a large number of bank accounts in recent months as part of an investigation into possible money-laundering linked to the Malaysia's state-fund.

South Korea's won eased as January inflation slowed to a four-month low, adding to pressure on the central bank for interest rate cuts.

The Taiwan dollar bucked regional weakness on increasing corporate demand before the long Lunar New Year holidays next week.

Oil prices extended losses on concerns over top energy consumer China and rising supply glut. Global factories stayed subdued in January with US and China manufacturing activity contracting. Asian equities fell.

"Risk assets including Asian currencies have not found a rising momentum yet. There is no possibility to see a sudden improvement in economic data," said Jeong My-young, Samsung Futures' research head in Seoul.

"A wave of monetary policy easing briefly saved risk assets, but we need to see how much the ECB will pump up money in March. We also need to confirm that the Fed will postpone interest rate hikes." Most emerging Asian currencies had gained after the Bank of Japan on Friday adopted negative interest rates, while the European Central Bank is widely expected to ease monetary policy further in March.

Federal Reserve Vice Chairman Stanley Fischer said on Monday the US economy could suffer, with inflation remaining too low, if recent volatility in financial markets persists and signals a slowdown in the global economy.

RINGGIT

The ringgit slid as lower crude prices underscored concerns over Malaysia's falling oil and gas revenue and resulting pressure on government finances. The country is a major supplier of palm oil and natural liquefied gas.

Traders unwound bullish bets in the best-performing Asian currency so far this year.

The Malaysian currency also slid on selling against the neighbouring Singapore dollar. It is now at 2.9393 to the Singapore dollar, 0.7 per cent lower than its close on Monday, Bloomberg reported.

Investors had added optimistic positions on the ringgit against the city-state currency as risks of Singapore's easing grew.

WON

The won fell as offshore funds unloaded the currency with foreign investors turning to net sellers in Seoul shares .

Traders had earlier built up bullish bets on the won due to exporters' demand for settlements, but rushed to dump the holdings on offshore funds' selling.

South Korea will unveil stimulus measures on Wednesday as a collapse in exports and cooling inflation threaten a fragile recovery in Asia's fourth-largest economy.

TAIWAN DOLLAR

The Taiwan dollar gained as exporters bought the unit around 33.400 per the US dollar for settlements before the Lunar New Year holidays.

The island's currency found further support after foreign investors on Monday bought a net T$6.9 billion ($206.5 million) worth of local equities, according to the Taiwan Stock Exchange.

Still, importers also purchased the greenback around 33.400 level for payments before the holidays.

Taiwan's foreign exchange market will be closed next week and resume trading on Feb. 15.

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