Malaysia’s ringgit took a bit of a tumble on Tuesday, hitting its lowest level since the Asian financial crisis. The currency’s not having the best year so far, with a drop of over 4 percent already. Factors like not-so-great export performance and rising US interest rates aren’t helping matters.
The country’s central bank governor, Datuk Abdul Rasheed Ghaffour, pointed to “external factors” like those US rate hikes, along with geopolitical issues and uncertainty about China’s economic future. He did, however, mention that the ringgit’s current value doesn’t quite line up with Malaysia’s positive economic outlook.
But there’s some optimism on the horizon. Abdul Rasheed Ghaffour expects that as global trade and Malaysian exports pick up, the ringgit should follow suit.
This isn’t the first time the ringgit’s taken a hit like this. Back in 2016, during another rough patch for emerging-market currencies, the ringgit was at a similar low. Malaysia’s second finance minister, Amir Hamzah Azizan, thinks things will turn around once US authorities put a stop to those pesky rate hikes.
He’s also confident that the hard work of Malaysia’s leaders to bring in foreign investments will give the ringgit the boost it needs.
(source: Bloomberg | Barron’s | BNN)
