KUALA LUMPUR (Jan 30): Malaysia’s 10-year bonds headed for the biggest monthly increase since 2008 as global financial turmoil and slowing economic growth boosted demand for the relative safety of government debt.

The yield on the 2024 notes fell 29 basis points, or 0.29 percentage point, in January to 3.86 percent as of 9:50 a.m. in Kuala Lumpur, data compiled by Bloomberg show. While Malaysian bonds offer a premium over debt in the U.S., Japan and the euro area, the ringgit slumped this month as the collapse in crude prices crimped revenue for the oil-exporting nation.

“Some funds are buying bonds to hedge against the weaker economic prospects,” said Nik Mukharriz Muhammad, a Kuala Lumpur-based fixed-income analyst at CIMB Investment Bank Bhd. “Malaysian yields are also much more attractive.”

Prime Minister Najib Razak this month cut the nation’s growth target to 4.5 percent to 5.5 percent, from as much as 6 percent, and also revised the budget deficit estimate higher. Currency reserves have fallen to the lowest level since 2011 on speculation the central bank was trying to stem losses in the ringgit, which at 3.6 percent in January makes it the worst- performing Asian currency.

Oil-related industries account for a third of Malaysian state revenue. The government raised its 2015 fiscal deficit target to 3.2 percent of gross domestic product from 3 percent amid a 56 percent slump in Brent crude since June.

The ringgit fell 0.7 percent this week to 3.6258 a dollar in Kuala Lumpur, data compiled by Bloomberg show. The currency’s monthly loss was the biggest since September and it declined to a more than five-year low of 3.6375 on Jan. 29.

Malaysia sold 3 billion ringgit ($826 million) of government bonds maturing in 2017 at a yield of 3.542 percent Thursday, according to the central bank. Demand exceeded the amount on offer by 2.6 times, the highest bid to cover since August, data compiled by Bloomberg show.