RINGGIT

THE ringgit closed sharply lower against the US dollar in line with the weakening Chinese yuan after Chinese authorities fixed a sharply weaker trading band yesterday, dealers said.

Dealers said the weakening of the yuan would compel countries trading with China to let their currencies move lower.

The ringgit eased to 3.1370/1394 against the US dollar from 3.1280/1315 on Wednesday.

The local currency was also lower against the Singapore dollar at 2.4521/4550, from 2.4459/4521, on Wednesday but rose against the Japanese yen to 4.0825/0873, from 4.0915/1002, previously.

The ringgit fell against the British pound to 4.9204/9256, from 4.9063/9151, but rose against the euro to 4.3087/3133, from 4.3103/3188, on Wednesday.

INTERBANK RATES

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

The overnight rate settled at 2.98 per cent while the one-week, two-week and three-week rates pegged were pegged at 3.02, 3.05 and 3.07 per cent, respectively.

Liquidity surplus in conventional operations were reduced to RM20.64 billion from an earlier estimate of RM29.30 billion.

The surplus in the Islamic system, however, increased to RM3.39 billion from an earlier estimate of RM3.36 billion.

Bank Negara also issued eight tenders comprising four conventional, one repo and three Al-Wadiah. It also called for a late RM20.6 billion conventional money market tender and a RM3.30 billion Al-Wadiah tender, both for one-day money.

KLIBOR

THE three-month Kuala Lumpur Interbank Offered Rate (KLIBOR) futures contracts on Bursa Malaysia Derivatives closed unchanged with trading dominated by strip trades.

Dec 2011, March 2012 and June 2012 were unchanged at 96.79, 96.92 and 96.92 respectively.

Turnover stood at 1,200 lots. There was no trading on Wednesday.

The five-year Malaysian Government Securities futures contracts were untraded. The underlying three-month KLIBOR stood at 3.26 per cent. — Bernama