Ringgit set for first annual decline

(Bloomberg) – Malaysia’s ringgit was poised for its first annual decline in three years on concern growth in Southeast Asia’s third-biggest economy is slowing.

Gross domestic product will rise 5 percent to 5.5 percent this year, compared with an earlier estimate of 5 percent to 6 percent, the government said on Oct. 7. “There is going to be a risk” to Malaysia’s economic growth should Europe’s credit crisis worsen, central bank Governor Zeti Akhtar Aziz said on Nov. 15.

The ringgit dropped 3.4 percent this year to 3.1695 per dollar as of 9.13 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. The currency advanced 0.3 percent today.

“The ringgit and most emerging-market currencies in Asia declined because of the unresolved debt crisis in Europe,” said Calbert Loh, head of treasury at Bangkok Bank Bhd in Kuala Lumpur. “I’m looking at the 3.05 to 3.20 range to the dollar in the first quarter.”

Five-year government bonds rose this year. The yield on the 4.262 percent notes due September 2016 fell 31 basis points, or 0.31 percentage point, to 3.22 percent, according to Bursa Malaysia.