Malaysia's Ringgit Falls as U.S. Slowdown May Curtail Exports

By David Yong

Nov. 4 (Bloomberg) -- Malaysia's ringgit weakened after declines in U.S. manufacturing, auto sales and construction spending added to speculation that a slowdown in the world's largest economy will damp demand for Asian exports.

The currency fell from near a two-week high before a trade ministry report tomorrow that may show Malaysia's exports increased in September by the slowest pace in six months. The government will today cut its growth forecast of 5.3 percent for 2009, Deputy Prime Minister Najib Razak said last month.

``The financial crisis has started to affect the real sector and that should curtail global demand,'' said Joanna Tan, an economist at Forecast Pte. in Singapore. ``Trade is on a weakening trend and we expect further weakness in the ringgit.''

The ringgit dropped 0.6 percent to 3.54152 per U.S. dollar as of 9:02 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. The currency yesterday reached 3.5075, the highest since Oct. 15.

Malaysian exports grew 7.7 percent in September from a year earlier, the least since March, according to the median forecast in a Bloomberg News survey. The U.S. accounted for 11 percent of Malaysia's shipments this year, the most after Singapore.

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