By David Yong
Nov. 13 (Bloomberg) -- Malaysia's ringgit fell to the lowest in almost two years on speculation the global credit- market crisis will deepen, prompting investors to stay away from emerging-market assets.
The currency slid for a third day as stocks in Australia, Japan and South Korea slumped, tracking losses in U.S. equities. Shares fell on U.S. Treasury Secretary Henry Paulson's plan to use the second half of the $700 billion financial rescue program to help relieve pressures on consumer credit and scrap an effort to buy devalued mortgage assets. A report showed U.K. unemployment claims rose to the highest since March 2001.
``Market participants are likely to dine on burnt toast as increasing risk concerns are likely to deliver new territory moves for currencies,'' said David Croy, a strategist in Wellington at ANZ Investment Bank. ``Risk aversion is on the rise'' on worries over the unraveling of economic support packages, he said by phone today.
The ringgit traded at 3.5975 per dollar as of 8:26 a.m. in Kuala Lumpur versus 3.5935 late yesterday, according to data compiled by Bloomberg. It fell as much as 0.6 percent to 3.6163, the weakest since December 2006.
Yields on emerging-market debt are 6.53 percentage points higher than yields on U.S. Treasuries, according to the JPMorgan EMBI+ Index. The risk premium rose 61 basis points yesterday to near a two-week high. A basis point is 0.01 percentage point.
The ringgit has slid 10 percent since crude oil fell from a record $147.27 per barrel on July 11, while palm oil has more than halved over the same period. Both accounted for 15 percent of exports this year, the trade ministry said.
To contact the reporter on this story: David Yong in Singapore at dyong@bloomberg.net.
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