Malaysian Ringgit Sees Steep Decline, Lowest in 26 Years

Malaysia's ringgit hit its lowest level since the Asian financial crisis on Feb 20, as emerging Asian currencies suffered against the dollar. In trade on Tuesday, the Malaysian ringgit fell nearly 0.3 percent to almost 4.8 against the greenback, its worst reading since January 1998 during the Asian financial meltdown. This year, the currency had suffered a more than 4 percent drop, partly due to poor export performance and rising US interest rates.

The Singapore dollar was trading at RM3.568 on Feb 20. On Tuesday, Malaysia's central bank governor, Datuk Abdul Rasheed Ghaffour, said that the currency's performance had been affected by "external factors" such as US rate hikes, geopolitical concerns, and uncertainty about China's economic prospects.

"The current level of the ringgit does not reflect the positive prospects of the Malaysian economy going forward," he said.

He said expected growth in global trade and Malaysian exports should positively impact the currency this year. The ringgit had previously hit its lowest point since the Asian financial crisis in 2016, when emerging-market currencies were hammered by capital flight fuelled by an expected rise in US interest rates.

Malaysia's second finance minister, Amir Hamzah Azizan, told state news agency Bernama on Monday he expected the currency to strengthen against the dollar after US authorities signaled an end to rate hikes.

"Apart from that, all the hard work that the prime minister and finance minister... have done to bring in foreign direct investments will also play a part in strengthening the local economy," he said.

"This will surely improve the ringgit."