EM ASIA FX-Ringgit hits 5-1/2 year low as oil slides, lags peers

* Ringgit hits 5-1/2 year low versus dollar

* But most Asian currencies steady to firmer versus dollar

* Drop in U.S. bond yields helps keep dollar in check

By Masayuki Kitano

SINGAPORE, Jan 13 (Reuters) - The Malaysian ringgit hit a

5-1/2 year low versus the dollar on Tuesday, dented by a renewed

slide in oil prices, underperforming on a day when most other

Asian currencies were steady to firmer.

The ringgit touched a low of 3.5870 versus the

dollar as of 0626 GMT, its lowest level since July 2009

according to Reuters data.

The ringgit fell as oil prices came under renewed pressure,

with Brent crude falling to its lowest level in more

than five years.

"The drop in oil prices will renew the pressure on the

ringgit," Citi strategist Gaurav Garg said in a research note,

adding that market sentiment towards Malaysian assets is likely

to worsen despite a recent bounce in the prices of crude palm

oil (CPO).

"Even though CPO prices have risen 12 percent since mid-

December (as floods threaten supply) and despite the buffer from

the geographically segmented nature of the natural gas market,

market sentiment towards Malaysian assets will likely sour

because fiscal policy becomes more challenging as energy prices

fall."

The cost of insuring Malaysian sovereign debt has risen the

most this year compared with that of its Southeast Asian peers

as state investor 1MDB's financing woes grew and concerns

deepened about the prospects for the net oil exporter's

petroleum revenues.

Other than the ringgit, most Asian currencies were steady to

firmer versus the dollar.

A fall in U.S. Treasury yields was helping to weigh on the

greenback and lending some support to Asian currencies, said

Satoshi Okagawa, senior global markets analyst for Sumitomo

Mitsui Banking Corporation in Singapore.

"The focus is on the dollar rather than Asia, so it all

hinges on how the dollar performs," Okagawa said, referring to

the near-term outlook for Asian currencies.

The U.S. 10-year Treasury yield has fallen roughly 7 basis

points this week, and last stood near 1.900 percent.

SOUTH KOREAN WON

The won eased back versus the dollar, after touching a fresh

two-month high of 1077.2 earlier on Tuesday.

The won had gained support earlier after a rally in the

Japanese yen tempered worries over possible won-selling

intervention by the financial authorities. The Japanese yen

touched a one-month high versus dollar earlier on Tuesday, but

later fell back.

Investors have reined in overly bullish views on the won

bearing in mind that South Korean authorities have a

predisposition towards keeping the currency competitive against

the Japanese yen.

CURRENCIES VS U.S. DOLLAR

Change on the day at 0625 GMT

Currency Latest bid Previous day Pct Move

Japan yen 118.68 118.38 -0.26

Sing dlr 1.3352 1.3342 -0.07

Taiwan dlr 31.821 31.856 +0.11

Korean won 1082.36 1081.40 -0.09

Baht 32.85 32.89 +0.11

Peso 44.83 44.88 +0.10

Rupiah 12600.00 12595.00 -0.04

Rupee 62.09 62.14 +0.08

Ringgit 3.5870 3.5670 -0.56

Yuan 6.2019 6.2036 +0.03

Change so far in 2015

Currency Latest bid End prev year Pct Move

Japan yen 118.68 119.66 +0.83

Sing dlr 1.3352 1.3260 -0.69

Taiwan dlr 31.821 31.718 -0.32

Korean won 1082.36 1099.30 +1.57

Baht 32.85 32.90 +0.15

Peso 44.83 44.72 -0.25

Rupiah 12600.00 12380.00 -1.75

Rupee 62.09 63.03 +1.51

Ringgit 3.5870 3.4965 -2.52

Yuan 6.2019 6.2040 +0.03

------------------------------------------------

(Additional reporting by Joonhee Yu in SEOUL)