Malaysian Ringgit Hits 26-Year Low

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On Tuesday, February 20th, Malaysia’s ringgit plummeted to its lowest level since the Asian financial crisis, mirroring the downturn experienced by emerging Asian currencies vis-à-vis the dollar.

During trading on Tuesday, the Malaysian ringgit depreciated by nearly 0.3 percent, reaching approximately 4.8 against the US dollar, marking its weakest performance since January 1998 amid the Asian financial turmoil.

The ringgit had already experienced a decline of more than 4 percent since the beginning of the year, attributed partially to lackluster export figures and escalating US interest rates.

As of 7 p.m. on February 20th, the Singdollar was valued at RM3.568.

Datuk Abdul Rasheed Ghaffour, Malaysia’s central bank governor, noted on Tuesday that the currency’s downturn was influenced by “external factors” such as US interest rate hikes, geopolitical tensions, and uncertainties surrounding China’s economic trajectory. Ghaffour underscored that the ringgit’s current valuation did not mirror the positive outlook for Malaysia’s economy in the future.

He expressed optimism that anticipated growth in global trade and Malaysian exports would buoy the currency’s performance in the coming months.

The ringgit had previously hit its lowest point since the Asian financial crisis in 2016, amidst a broader decline of emerging-market currencies driven by capital outflows amid expectations of increased US interest rates.

Malaysia’s second finance minister, Amir Hamzah Azizan, conveyed to the state news agency Bernama on Monday his anticipation of the ringgit’s strengthening against the dollar following indications from US authorities signaling a halt to rate hikes.

Azizan highlighted the concerted efforts of the prime minister and finance minister to attract foreign direct investments as a catalyst for bolstering the local economy, which, in turn, would positively influence the ringgit’s performance.

He expressed confidence that these endeavors would contribute to the ringgit’s improvement in the foreseeable future.