Ringgit falls as China’s lower fixing spurs Asia risk aversion

At 9.12 am(0112GMT), the local unit was quoted at 4.0700/0760 against the greenback from 4.0470/0520 at 5 pm on Wednesday.

KUALA LUMPUR: The ringgit led declines in Asia and fell to a seven-week low after China cut the yuan’s fixing for a seventh day, fueling concern a slowdown in the region’s biggest economy will crimp demand for Malaysian exports.

China’s lower reference rate caused risk aversion across Asian markets along with North Korea saying it successfully tested its first hydrogen bomb. The yuan traded in Hong Kong declined to a five-year low on speculation China will favor currency depreciation to spur growth. “Since the Chinese currency is weakening, it signals that Chinese demand will be weak,” said Sean Yokota, Singapore-based head of Asia strategy at Skandinaviska Enskilda Banken AB. “The North Korea news is also weakening Asian currencies.”