Malaysian Ringgit Near Two-Year Low Before Central Bank Meeting

By David Yong

Nov. 24 (Bloomberg) -- Malaysia’s ringgit was near a two- year low against the dollar before central bank policy makers meet today for their final scheduled meeting on interest rates for 2008.

Half of the 16 economists surveyed by Bloomberg News predict Bank Negara Malaysia will maintain its overnight rate at 3.5 percent. Seven expect a cut to 3.25 percent and one called for a 50 basis-point reduction. The central bank has kept the benchmark on hold for 20 straight meetings since April 2006. The ringgit has lost 8.7 percent this year as investors exited emerging- market assets amid the global economic slowdown.

“Cutting interest rates to reflate the economy may come at the cost of a weakening currency, so it’s a difficult choice,” said Zulkifli Hamzah, head of research at MIDF Amanah Investment Bank Bhd. in Kuala Lumpur. “They may prefer to let the fiscal stimulus work its way first.”

The ringgit traded at 3.6150 per dollar as of 9:10 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. It reached 3.6425 on Nov. 21, the lowest level since November 2006.

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