IMPORTERS are feeling the effects of a depreciating ringgit, which is greatly raising the cost of doing business.

Chuah Seong Kok, director of Soon Thye Hang, a dried seafood importer, said the high exchange rate has severely impacted business.

“Imported products are sold in US dollars while a few trade with the Chinese yuan,” Chuah said.

“When the ringgit falls, it has a direct impact on commodity prices which then triggers another wave of price hikes.”

Finance Minister Tengku Zafrul Tengku Abduallah Aziz had previously said that a depreciating ringgit is a boon for exporters.

Chuah asked if the minister had given a thought to the importers.

“Our import cost has gone up by 5% because of the weak ringgit.”

While suppliers allow credit to the importers, sums owed must be settled within 30 days, he said.

“Five weeks ago, when I made my purchase, the ringgit was trading at 4.5 against the dollar; now the rate is 4.55.”

Chuah said local businesses will consider raising their prices too.

“Because the customers may not accept it, we may have to bear the higher costs.”

Chuah said businesses were only now slowly recovering from the effects of the pandemic.

“We don’t dare to keep too much stock only to sell when the exchange rate falls like we did in the past,” he said.

Chuah hoped the government will come up with solutions to stabilise the ringgit in the upcoming budget, or announce a date for the general election.”

“Only with political stability will foreign investors and businesses regain confidence in our country and allow the economy to recover,” he said.

Perak Sundry Shops Guild president Beh Keat Soon said the higher dollar has driven up by 10-20% the prices of dry goods from India, China and Vietnam.

“MSG (monosodium glutamate) has gone up the most.”

Beh said consumers have been spending less and purchasing only what is necessary.

“They are no longer able to afford a lot of these items,” he said.

“We can only hope that the government can stabilise the ringgit so that the prices of goods will come down and purchasing power will go up.”

Subsidies for lower-income groups and better access to loans for businesses will also be helpful, Beh said.

Restaurant and Bistro Owners Association vice-president Jeremy Lim said the price of beef from Australia and Japan has increased 30-40% because of the exchange rate.

“You can sell pizza without meat, but cheeses and tomatoes are still imported,” Lim, who owns Modern Asian Food, said.

“We also can’t change our menus and charge our customers the market price. It will scare them away.

“We are facing so many issues but who can we complain to? If we hike up our prices, consumers will say that we are taking advantage of the situation.”

Lim said strengthening the ringgit and stabilising the economy is the only solution.

Last week, Tengku Zafrul said Malaysia is not experiencing an economic crisis just because the ringgit has devalued against the dollar.

He said that while the ringgit had weakened against the dollar, the local note had strengthened against other currencies.

Yesterday, the ringgit slid marginally lower against the dollar due to a lack of buying momentum as demand for the greenback remained strong on the back of its safe-haven status.

At the day’s start, the ringgit fell to 4.5670/5710 against the greenback from 4.5660/5695 the day before.

At yesterday’s close, it declined against the Japanese yen to 3.2139/2172 from 3.1890/1919 and went down versus the Singapore dollar to 3.2207/2238 from 3.2196/2225.

The ringgit appreciated against the British pound to 5.1447/1492 from 5.1564/1603 and rose vis-a-vis the euro to 4.4958/4997 from 4.5002/5037. – September 24, 2022.