By David Yong
Nov. 10 (Bloomberg) -- Malaysia's ringgit rose, snapping two days of losses, on speculation spending programs by governments in the region will help revive economic growth.
The currency headed for the biggest gain in a week as Asian stocks snapped a two-day slide after China unveiled a $586 billion stimulus plan to bolster the world's fourth-largest economy. Malaysia may top up its 7 billion ringgit ($1.98 billion) fiscal stimulus plan announced on Nov. 4, the Star newspaper reported today.
``The market is reacting to China's plan because it's a crucial factor in cushioning the region from a major slowdown,'' said Suresh Kumar Ramanathan, a rates and currency strategist at CIMB Investment Bank Bhd. in Kuala Lumpur. ``The local factors are less encouraging.''
The ringgit advanced 0.6 percent to 3.5305 versus the dollar as of 8:55 a.m. in Kuala Lumpur, according to data compiled by Bloomberg.
Fitch Ratings today cut the outlook on Malaysia's credit rating to ``stable'' from ``positive,'' citing a slowdown in electronics exports and lower commodity prices on its balance of payments. China is Malaysia's fourth-largest export market.
Traders bet the ringgit will weaken to 3.5365 per dollar in three months, according to non-deliverable forwards contract. Forwards are agreements in which assets are bought and sold at current prices for delivery at a specified future date. They are settled in dollars.
To contact the reporter on this story: David Yong in Singapore at dyong@bloomberg.net.
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