RINGGIT

MALAYSIA'S ringgit climbed to a five-week high yesterday on speculation US efforts to remove toxic assets from banks will help unlock credit and spur demand for emerging-market assets.

The currency advanced for a fourth day against the dollar after the US Treasury announced it will finance as much as US$1 trillion in purchases of banks’ distressed assets to revive the financial industry without having to nationalize lenders.

The MSCI Asia Pacific Index of regional stocks climbed for a second day, headed for the highest close in almost two months.

“There’s optimism in the stock and currency market arising from the US measures,” said Lim Shyang Fuh, head of treasury at ECM Libra Investment Bank Bhd in Kuala Lumpur.

“Risk aversion has clearly subsided.”

The ringgit gained 0.4 per cent to 3.6265 per dollar as of 4.45 pm in Kuala Lumpur, according to data compiled by Bloomberg. It reached 3.6202, the strongest since February 17.

Investors put US$350 million into emerging-market equities in the week ended March 18, a second week of inflows, as risk appetite improved, according to Cambridge, Massachusetts-based EPFR Global, a research company that tracks US$11 trillion of funds worldwide.

Five of Asia’s 10 most-traded currencies excluding the yen rose after Treasury Secretary Timothy Geithner yesterday said the US will use US$75 billion to US$100 billion of its bank-rescue funds to buy illiquid real-estate assets.

The Public-Private Investment Program will also rely on Federal Reserve financing and Federal Deposit Insurance Corp debt guarantees.

INTERBANK RATES

SHORT-term rates closed steady yesterday with Bank Negara Malaysia intervening in the money market to absorb surplus funds, dealers said.

The total liquidity surplus in the conventional system declined to RM8.02 billion from an earlier estimate of RM17.7 billion.

For Islamic funds, the total liquidity surplus was reduced to RM3.6 billion from an earlier estimate of RM5.8 billion.

The central bank issued a late conventional tender for RM8 billion of one-day money and an Al-Wadiah tender for RM3.6 billion of one-day money.

KLIBOR

THE three-month Kuala Lumpur Inter-Bank Offered Rate (KLIBOR) futures contracts on Bursa Malaysia Derivatives closed untraded yesterday.

At close, no transaction was recorded for all contract months. The underlying three-month KLIBOR stood at 2.12 per cent.

The five-year Malaysian Government Securities futures were also untraded throughout the day. - Bernama