Malaysia's ringgit rebounded from a three-year low before a report that economists predict will show economic growth accelerated. Government bonds declined.

Gross domestic product increased 4.7 per cent in the second quarter after rising 4.1 per cent in preceding three months, according to the median of 22 estimates in a Bloomberg survey before data due at 6pm in Kuala Lumpur. The Malaysian currency, which has dropped almost seven per cent against the dollar this year, has weakened too much for an economy set to perform better in the coming months, Datuk Seri Abdul Wahid Omar, Minister in the Prime Minister's Department, said yesterday.

The ringgit appreciated 0.1 per cent to 3.2833 per dollar as of 9.23am in Kuala Lumpur, according to data compiled by Bloomberg. The currency reached 3.302 yesterday, the weakest level since June 10, 2010. One-month implied volatility, a measure of expected moves in the exchange rate used to price options, declined three basis points, or 0.03 percentage point, to 9.78 per cent.

"The expected improvement in GDP has certainly helped the ringgit," said Vishnu Varathan, an economist at Mizuho Bank Ltd in Singapore. "There will be some episodes of weakness in the Malaysian unit ahead of the Federal Reserve's meeting in September."

The Federal Open Market Committee releases minutes of its July meeting tomorrow. The Fed will start tapering bond buying next month, according to 65 per cent of economists surveyed by Bloomberg from August 9-13.

Consumer prices increased two per cent in July from a year earlier, the most since March 2012, according to the median estimate in a Bloomberg survey before an official report due at 5pm local time today. Malaysia's current-account surplus narrowed to RM900 million in the second quarter from RM8.7 billion in the preceding period, according to another Bloomberg survey before data due today.

"Fundamentally, the ringgit shouldn't be at this level," Abdul Wahid, who is in charge of economic planning, said in an interview in Kuala Lumpur. Southeast Asia's third-largest economy experienced a "slightly better" environment last quarter than the previous period and should do better in the second half, he said.

The yield on the 3.26 per cent bonds due March 2018 rose one basis point to 3.58 per cent according to data compiled by Bloomberg. It increased seven basis points in four days.-- Bloomberg