KUALA LUMPUR, Oct 23 — Malaysia’s ringgit led gains in Asia as the prospect of more monetary stimulus from the European Central Bank buoyed emerging-market assets and Prime Minister Najib Razak delivered his budget speech.

Najib pledged to boost consumption, spur private investment and accelerate selected infrastructure projects next year, while narrowing the fiscal shortfall to 3.1 per cent of gross domestic product from a revised 3.2 per cent in 2015. The MSCI Asia Pacific Index of stocks climbed with regional currencies Today as ECB President Mario Draghi suggested the euro area may need a fresh injection of stimulus by the end of the year to counter an economic slowdown.

“The ringgit is up on speculation the budget will be friendly, focusing on infrastructure and boosting consumer spending,” Wong Chee Seng, a currency strategist at AmBank Group in Kuala Lumpur said before Najib’s speech. “The ECB’s stimulus measures should drive flows to Asia.”

The ringgit strengthened 1.6 per cent to 4.2205 a dollar in Kuala Lumpur, following a 3.9 per cent loss over the previous five trading days, according to prices from local banks compiled by Bloomberg. It has declined 1 per cent this week. The currency’s 17 per cent slump this year has made it Asia’s worst- performing exchange rate as a slide in Brent crude prices hurt the region’s only major net oil exporter and a funding scandal linked to Najib spooked foreign investors.

The prime minister said in his annual address that Malaysia’s economy would expand 4 per cent to 5 per cent in 2016, compared with an estimate of 4.5 per cent to 5.5 per cent this year.

Consumer prices

Consumer prices in Malaysia rose 2.6 per cent in September from a year earlier, slower than the median estimate of 2.9 per cent in a Bloomberg survey and compared with a 3.1 per cent increase in August, official data released today showed. Foreign-exchange reserves climbed US$800 million (RM3.37 billion) in the two weeks to October 15 to US$94.1 billion, according to a Bank Negara Malaysia statement issued after markets closed yesterday. They dropped the most since 2008 last quarter.

Malaysian sovereign bonds due March 2019 gained, with the yield declining three basis points today and this week to 3.60 per cent, prices from Bursa Malaysia show. The 10-year yield increased one basis point to 4.15 per cent and rose three basis points from October 16. — Bloomberg