KUALA LUMPUR, July 29 — Malaysia’s ringgit sank as a slump in oil prices cast a cloud over the finances of Asia’s only major net oil exporter.

Brent crude slid to a three-month low at less than US$42 a barrel and was set for its biggest weekly decline since January, weighing on the outlook for the Southeast Asian economy which derives about a fifth of its revenue from energy-related sources. Probes into state fund 1Malaysia Development Bhd. are also undercutting the ringgit.

"Sliding oil prices and the hovering 1MDB controversy” are having an impact, said Gao Qi, a strategist at Scotiabank in Singapore.

The ringgit retreated 0.5 per cent to 4.0712 per dollar as of 5:05pm in Kuala Lumpur, the biggest loss since July 20, according to prices from local banks compiled by Bloomberg. It has lost 1 per cent this month, the worst performance among Asian currencies.

Last week, authorities in Singapore and the US moved to seize assets linked to alleged fraud involving 1MDB, the latest chapter in the troubled company’s woes, which have implicated Prime Minister Najib Razak. The Malaysian government said it will cooperate with lawful investigations of local companies or its citizens.

The 10-year government bond yield rose two basis points to 3.63 per cent while the five-year yield declined one basis point to 3.22 per cent, according to prices from Bursa Malaysia. — Bloomberg