Vancouver Sun

Plunging oil prices send ringgit crashing

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Malaysia’s ringgit completed its biggest quarterly drop since the Asian financial crisis as plunging oil prices put strains on the country’s budget and exports. A 49 per cent decline in the price of Brent crude last year is reducing state revenue for Malaysia, a net oil exporter, and hampering the government’s deficitred­uction plans. The ringgit led declines in emerging-market Asian currencies as the prospect of higher U.S. interest rates next year sap demand for developing­nation assets. The ringgit fell 6.2 per cent since the end of September to 3.4973 per dollar in Kuala Lumpur, according to data compiled by Bloomberg. That was the biggest drop since the period ending June 1998. The currency reached a five-year low of 3.5073 on Dec. 8. It lost 3.3 per cent last month and 6.3 per cent last year. Malaysia is the only net oil exporter among major Asian economies and Bank of America Merrill Lynch estimates crude-related industries account for a third of the state revenue.

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