Ringgit’s fall not a concern, says international trade minister

Sheridan Mahavera Lee Chi Leong Sheridan Mahavera, Lee Chi Leong Updated 7 years ago · Published on 19 Apr 2019 7:00AM · 4 Comments

International Trade and Industry Minister Darell Leiking says there are pros and cons to a weakening ringgit with some benefiting while others experience pain. – The Malaysian Insight pic by Kamal Ariffin, April 19, 2019.

THE ringgit’s recent decline against the US dollar is not a concern yet, said International Trade and Industry Minister Darell Leiking, as other countries have also seen similar fluctuations with their currencies.

The ringgit closed at RM4.14 to US$1 yesterday, the lowest rate in almost three months.

Experts said the decline is likely due to negative news headlines and worries over the US-China trade spat, as the Malaysian economy relies heavily on exports.

But Leiking is more optimistic.

“I think BNM (Bank Negara Malaysia) has strategies to overcome this,” he said.

“The fluctuation of the currency is something we are not that concerned with yet as there are other countries facing the same problems.”

The ringgit also fell against the Singapore dollar at RM3.0485 but strengthened against the Japanese yen at RM3.6923 to 100 yen. 

Leiking said some people will complain about the currency’s value while others will look to it as an opportunity.

“It is interesting to see how people will complain about the weakening ringgit and at the same time, some people are happy when the ringgit goes a bit down but not totally down. It creates an opportunity for them.

Analysts say there is nothing to panic about the fall in the ringgit against the dollar lately. – AFP pic, April 19, 2019.

“But to me, if I travel a lot, I worry as well because a weak ringgit means higher exchange rates.”  

Analysts have also said there is no cause for panic over the ringgit’s depreciation which could continue in the short term but the slide could end by year-end.

The weakness in the local unit is sentiment-driven, fuelled by negative news, including speculations that global index provider FTSE Russell is reviewing Malaysia’s market accessibility level in its World Government Bond Index (WGBI) over concerns about market liquidity.

There has not been excessive capital flight from the country despite the ringgit’s slide, they said, adding that investors are not panicking.

Malaysia’s trade performance where exports have slowed down is not out of line with the rest of Asia. All of these, coupled with improvements in foreign reserves, are signs that investors are not panicking, OCBC Bank’s currency economist, Terence Wu, told The Malaysian Insight.

“We continue to see no signs of excessive investor panic and do not believe that it will significantly impinge on Malaysia’s macro-economic fundamentals on a longer-term basis.” – April 19, 2019.

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Comments

  • We may not have a very intelligent or smart minister but don't need such a stupid one. Currency dropped is a concern to everybody bcos of imported inflation, beyond what we can do locally.

    Posted 7 years ago by James Wong · Reply

  • Kan nin neh... Can all these ministers go attend public relation course? They should know something can not be said! Despite further explanation will not help as people will focus on that particular sentence!

    Posted 7 years ago by Chean Ang Heng · Reply

  • Not a concern!? Yes, for you.

    Posted 7 years ago by Z Azmyl · Reply

  • If I travel a lot, I worry as well ... because of high exchange rates. Wow ! What amazing insight

    Posted 7 years ago by Nor Azah Razali · Reply