Friday, May 1, 2009

Ringgit strengthens to 4-week high

THE ringgit posted its biggest monthly gain of the year as the central bank said economic stimulus spending will help revive growth in the second half and left interest rates unchanged. Bonds declined.

The currency reached a four-week high as a global stocks rally helped revive investors' risk appetite, bolstering demand for emerging-market assets. Japan reported its first increase in industrial output in six months and the Federal Reserve said a recession is easing in the world's biggest economy.

"There are reasons to be positive as the fiscal stimulus should start to produce results," said Yeo Chin Tiong, head of treasury at OSK Investment Bank Bhd. in Kuala Lumpur. "The risk-taking culture should return and that's positive for the ringgit as well as the regional currencies."

The ringgit gained 0.7 per cent to 3.5615 per US dollar as of 5.14pm in Kuala Lumpur, according to data compiled by Bloomberg. It climbed 2.4 per cent this month and earlier yesterday reached 3.5525, the strongest since April 6.

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