Malaysia’s ringgit advanced toward a five-week high on speculation the Federal Reserve will maintain its stimulus policy that has boosted inflows into emerging-market assets. Government bonds were little changed.
The monetary authority should continue its bond-buying program through the end of 2013, Boston Fed President Eric Rosengren and Chicago Fed President Charles Evans said. Global funds bought 1.7 billion ringgit ($549 million) more Malaysian stocks than they sold in February, the third straight month of net purchases, according to stock exchange data.
“We still see some inflows from the quantitative easing,” said Choong Yin Pheng, senior manager for fixed income and economic research at Hong Leong Bank Bhd. in Kuala Lumpur. “The Fed speeches were calling for more QE at least through the end of this year.”
The ringgit advanced 0.1 percent to 3.0955 per dollar as of 9:05 a.m. in Kuala Lumpur, according to data compiled by Bloomberg. It touched 3.0859 on March 25, the strongest level since Feb. 14. One-month implied volatility, a measure of expected moves in exchange rates used to price options, fell two basis points, or 0.02 percentage point, to 6.74 percent.
The yield on the 3.26 percent sovereign bonds due March 2018 was 3.22 percent, according to data compiled by Bloomberg.
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