Ringgit hits 3-week high after Malaysia cuts fuel subsidies

The Malaysian ringgit hit a three-week high on Tuesday, outperforming some Southeast Asian currencies, as offshore funds bought it after the government cut fuel subsidies to reduce the country's fiscal deficit.

The ringgit advanced 0.29 per cent to 3.2645 against the US dollar, after hitting 3.2590, its strongest since Aug 13.

That compared with a 0.23 per cent gain for the Thai baht and 0.27 per cent appreciation of the Philippine peso.

Late Monday, Malaysia Prime Minister Najib Razak looked to sidestep political opponents and temper market jitters by cutting fuel subsidies to beef up the country's fiscal position, which had spurred capital outflows. The cuts in petrol subsidies, effective from Tuesday, will save the government an estimated 1.1 billion ringgit (S$429 million) this year and another 3.3 billion ringgit in 2014, he said.