Malaysian Ringgit Plunges to Record Low

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Liputan6 English Version –┬áThe Malaysian ringgit hit its lowest level since the 1998 financial crisis, triggering investor concerns about the country’s economic outlook.

According to Bloomberg data, the Malaysian ringgit closed at 4.7958 per U.S. dollar on Tuesday, down 0.2% from the previous day. This is the lowest level since 1998, when Malaysia experienced a financial crisis.

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The decline in the ringgit’s exchange rate was caused by a number of factors, including rising interest rates in the United States, weakening global economic growth, and geopolitical uncertainty.

Rising interest rates in the United States make the U.S. dollar more attractive to investors, thus driving down other currencies, including the ringgit. Weakening global economic growth also makes investors more cautious about investing in developing countries, including Malaysia.

Geopolitical uncertainty, such as the war in Ukraine, has also worsened sentiment towards the Malaysian currency.

Investors now hope the Bank Negara Malaysia (BNM) will take action to support the ringgit. BNM will announce its policy decision on Thursday.

Although Bloomberg Economics predicts that BNM will not raise interest rates, some analysts predict that the central bank will announce other measures to save the ringgit, such as foreign exchange market intervention or government bond purchases.

The decline in the ringgit’s exchange rate could have a negative impact on Malaysia’s economy. This could make imports more expensive and exports cheaper, thus hampering economic growth.

In addition, the decline in the ringgit’s exchange rate could also make the cost of living in Malaysia higher, thus reducing household purchasing power.

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Investors are now awaiting BNM’s decision on Thursday to see if the central bank will take steps to support the ringgit.(MIS)

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