Ringgit to Fall as Much as 4.6% After By-Elections, ING Predicts

By Patricia Lui

April 8 (Bloomberg) -- The Malaysian ringgit may fall as much as 4.6 percent after the opposition coalition, led by Anwar Ibrahim, won two out of three regional elections, according to ING Groep NV.

“Political risk is very elevated,” Tim Condon, head of Asia research in Singapore at ING wrote in a research note today. The ruling coalition “has been on the ropes since its worst-ever general election performance a year ago.”

Bank Negara Malaysia, whose foreign-exchange reserves fell by about $3 billion in March, will resist any decline in the ringgit beyond 3.80 per dollar, Condon wrote. The currency fell 0.9 percent to 3.6245 today.

To contact the reporter on this story: Patricia Lui in Singapore at plui4@bloomberg.net