KUALA LUMPUR, March 15 — The ringgit fell for a second day and Malaysian stocks snapped a three-day gain as renewed weakness in Brent crude prices underscored the vulnerability of the oil-exporting nation to gyrations in commodities.

The currency led losses in emerging markets as Brent slumped below US$40 (RM164.82) a barrel after rising through that level last week for the first time since December.

Mark Mobius said the ringgit is still 28 per cent undervalued despite being one of Asia’s top performers this year following its biggest annual slump since 1997. The move lower in raw materials spurred a retreat in developing-nation shares from 2016’s high.

“Declining oil prices and dollar strength are weighing on the ringgit,” said Christopher Wong, a Singapore-based senior foreign-exchange analyst at Malayan Banking Bhd.

“The fall could be a pause from the recent rally and ahead of the Federal Reserve meeting.”

The ringgit dropped 0.4 per cent to 4.1207 a dollar as of 12:07pm in Kuala Lumpur, trimming the year’s gain to 4.2 per cent, according to data from local banks compiled by Bloomberg. It climbed to 4.0765 on March 7, the strongest since August.

Malaysia is an attractive prospect, Mobius, executive chairman at Templeton Emerging Markets Group, said in an interview in Kuala Lumpur today.

Developing-nation assets are at a turning point, he said. While the MSCI Emerging Markets gauge of shares dropped today, it’s rebounded from January’s seven-year low.

The ringgit is likely to consolidate around 4.10-4.15 a dollar over the next few days, said Malayan Banking’s Wong.

He predicts the currency will trade at 4.10 by the end of March and 4.25 by June 30.

HSBC Holdings Plc revised up its forecasts in a sign analysts are less bearish on the ringgit’s outlook.

The bank predicts it will end the second quarter at 4.15 rather than 4.35 previously, and amended the year-end projection to 4.25 from 4.4. The median estimate in Bloomberg surveys is for 4.30 and 4.35, respectively.

The FTSE Bursa Malaysia KLCI Index declined 0.3 per cent from Monday’s highest close since October. The measure has eked out a 0.2 per cent gain this year following a 3.9 per cent slump in 2015.

Malaysian government bonds fell, with the 10-year yield rising one basis point to 3.94 per cent, data from Bursa Malaysia show.

That’s the highest since Feb. 29. On a more positive tone, the cost to insure the nation’s debt for five years using credit-default swaps dropped to a seven-month low of 153 overnight, according to CMA prices. — Bloomberg