Ringgit gains most since December on bets inflows will quicken

Malaysia’s ringgit rose the most in four months, leading gains in Asia, on speculation fund flows to emerging markets will accelerate as their growth outpaces developed economies.

The MSCI Emerging Markets Index of stocks reached a four- month high after U.S. shares posted the biggest three-day loss in more than two months.

Developing Asia will expand 6.7 percent this year and 6.8 percent in 2015, the International Monetary Fund forecast in January.

The Washington-based lender predicts the U.S., the world’s largest economy, will grow 2.8 percent in 2014 and 3 percent in 2015. Estimates will be updated on Tuesday.

“The resilience in emerging-market assets is an indication that probably there’s some rotation out of developed market equities,” said Nizam Idris, Singapore-based strategist at Macquarie Bank Ltd.

“That’s benefiting the currencies.”

The ringgit climbed 0.7 percent, the most since December 9, to 3.2484 per dollar as of 3:16 p.m. in Kuala Lumpur, according to data compiled by Bloomberg.

It touched 3.2451, the strongest since December 17.

The Bloomberg-JP Morgan Asia Dollar Index, which tracks 10 regional currencies against the greenback, rose 0.2 percent to 115.50.

One-month implied volatility in the ringgit, a measure of expected moves in the exchange rate used to price options, fell 20 basis points, or 0.20 percentage point, to 6.36 percent.

Malaysian exports rose 12.3 percent in February from a year earlier, exceeding the median estimate of economists for a 10.6 percent increase, official data showed April 4.

A government report due April 10 will probably show industrial production gained 6.2 percent in February, the fastest pace since July 2013, according to the median forecast in a Bloomberg survey of economists.

The nation’s economy will grow 4.5 percent to 5.5 percent in 2014, after expanding 4.7 percent last year, the central bank said in a March 19 report.

The ringgit will receive support from a recent uptick in Malaysia’s exports and an expected improvement in factory output, although speculation of further cuts in U.S. stimulus will weigh on the currency, said Ho Woei Chen, Singapore-based economist at United Overseas Bank Ltd.

The yield on Malaysia’s 4.181 percent sovereign bonds due July 2024 fell one basis point, its third day of declines, to 4.11 percent, data compiled by Bloomberg show. -- Bloomberg