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Ringgit hits lowest since 1998 Asian currency crisis

A combination of factors has been cited, including declining exports over the past six months as well as the conflict in Gaza.

1 minute read
The ringgit has fallen to its lowest level in 25 years.
The ringgit has fallen to its lowest level in 25 years.

The ringgit has fallen to its lowest level in 25 years, dropping 0.3% to 4.7635 against the US dollar, the weakest since the Asian financial crisis in 1998. 

At 9am today, the currency eased to 47615/7650 against the greenback from yesterday's close of 4745/7485.

Bloomberg reported that the ringgit is currently the worst performer in Asia this year after the yen. 

In addition to factors such as the dollar's gains in the wake of the conflict in Palestine, it noted that Malaysia had seen six months of consecutive decline in exports up to August.

Bloomberg quoted analyst Vishnu Varathan, an economist at Mizuho Bank in Singapore, as saying that the ringgit's underperformance was due to "real rate spreads that could turn a lot more unfavourable, especially as the subsidy rollback hits inflation and reveals softer real policy rates".

Meanwhile, Bank Muamalat Malaysia chief economist Mohd Afzanizam Abdul Rashid spoke of concerns over the Palestine-Israel conflict.

"The US president’s unequivocal support for Israel could potentially prolong the conflict and under such circumstances, the US dollar is likely to be the main beneficiary, given its safe haven status," Bernama quoted him as saying. 

At the market's closing yesterday, the ringgit also declined against other major currencies, easing against the euro to 5.0181/0218 from 5.0140/0182; against the yen (3.1794/1820 from 3.1685/1714); the Thai baht (13.0757/0907); the Indonesian rupiah (301.5/302.0) and the Singapore dollar (3.4669/469).