Malaysian Ringgit Falls for Seventh Day Before Factory Report

By David Yong

Aug. 11 (Bloomberg) -- Malaysia's ringgit fell for a seventh day before a government report today that may show factories produced fewer goods in June as export demand waned.

The currency extended last week's losses, the steepest in almost nine months, on speculation a decline in crude and palm oil prices will erode the nation's export receipts. Singapore, which surpassed the U.S. as Malaysia's biggest overseas market this year, cut its growth forecast last week as exports slumped.

``We could be at the start of a slowdown and there is a possible downgrade to the growth projection,'' said Awaluddin Shariff, a currency trader at EON Bank Bhd. in Kuala Lumpur. ``The ringgit will be weaker'' given the drop in Singapore's currency and economic outlook, he said.

The ringgit slid 0.4 percent to 3.3130 per dollar at 9:01 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. The currency is set to match its longest losing streak since Oct. 2, 2006. It may weaken to 3.32 this week, Awaluddin said.

Industrial production in Malaysia rose 2 percent in June from a year earlier, the smallest increase in a year, according to the median forecast in a Bloomberg News survey. It gained 2.5 percent in May and 4.8 percent in April.

Malaysian exports rose 18.4 in June versus 22.9 percent in May as shipments of electronics goods to the U.S. and Europe declined. Since then, crude oil has declined 17 percent and palm oil 23 percent. Both commodities accounted for 14.5 percent of Malaysia's exports this year.

To contact the reporter on this story: David Yong in Singapore at dyong@bloomberg.net.