Malaysian ringgit hits 17-year low against dollar


Malaysian ringgit slips to 4.3405 against dollar -17-year low -as drop in prices of crude oil and commodities hit

By P Prem Kumar

KUALU LUMPUR – The Malaysian ringgit has continued its downtrend, with the currency slipping to 4.3405 against the dollar — a 17-year low — as the greenback strengthened against most Asian currencies.

At close in Kuala Lumpur Monday, the ringgit had depreciated 1.64 percent against the dollar to finish at 4.3300 after it hit an intra-day low of 4.3405.

The ringgit registered its historical low against the dollar of 4.7125 in Jan. 1998, during the Asian financial crisis. Its strongest was 2.9390, recorded on July 27, 2011.

The ringgit also weakened against the Singapore dollar to hit an all-time low of 3.0424 on Monday, before closing at 3.0356.

Many analysts had indicated that the drop in prices of crude oil and commodities would add more pressure to the currency.

Moody’s senior research analyst Rahul Ghosh told Anadolu Agency on Tuesday that the direct impact of ringgit depreciation is manageable due to the low proportion of government debt denominated in foreign currencies.

He said by telephone that the depreciation of the currency was manageable for the sovereign, banks and rated corporates, although it indicated a weakening environment.

“We see ringgit depreciation as a symptom of declining export revenues, capital outflows, and worsening investor sentiment toward Malaysia,” he said.

“These are negatively impacting key credit buffers such as the current account surplus, foreign reserve coverage, and economic growth trajectory.”