Posted On: December 27, 2010
A surge in oil prices is contributing to gains in Malaysia's ringgit, Bloomberg News reported December 23
Oil and petroleum products comprise 9 percent of Malaysia's exports, the news service noted, so gains in the price of crude are supportive of growth in the Southeast Asian country. And with oil futures rising to nearly $91 per barrel - the highest level in more than two years - traders are growing increasingly bullish about the Malaysian economy's prospects.
"I see a massive flow into risky assets, especially the oil-and-gas sector," Kuala Lumpur-based currency trader Godwin Chan told Bloomberg. Those capital inflows are sending the ringgit higher; it has risen for three consecutive days.
Still, the situation reflects emerging-market currencies' sensitivity to positive economic developments - an indication that a bull market is in full swing.
While a rise in oil prices may be good news for Malaysia's economy, it remains unclear if gains in the ringgit are warranted. The currency's recent appreciation underscores the overall market's volatility - a factor that is unlikely to be resolved in the near-term.
Category: Industry News
Foreign Exchange Services for Business
With a focus on payment services, Western Union Business Solutions enables businesses of all sizes to send funds internationally through our global payment solutions.
See our available FX payment services