The value of the Ringgit continues to record a significant decline when it reached the lowest level in 26 years, dropping by 0.41% to 4.795 against the United States (US) dollar yesterday (February 20).
Today (February 21), the rate is at 4.80.
According to a report by Berita Harian, the national currency has reached its lowest level in history since the height of the Asian Financial Crisis in January 1998. Today’s latest rate also surpasses the lowest recorded on October 23, 2023, which was 4,7925.
Bank Muamalat Chief Economist, Dr Mohd Afzanizam Abdul Rahsid shared that, based on technical analysis, the Ringgit has already passed the resistance level of RM4.7958.
“We already know that currency trends are greatly influenced by external factors. Recently, China’s central bank has already reduced their interest rates by 25 basis points and it exceeded the expectations of economic analysts. This situation will definitely weaken the Yuan currency.”
“The Ringgit, on the other hand, is seen to be significantly linked to the Yuan currency. So, any movement of the Yuan will definitely have an impact on the Ringgit. The question is, what should policy makers do? This issue is not as easy as it seems and the solution cannot be compared to the one implemented in 1998,” he said.
Additionally, he believes that policy changes need to be made gradually and not suddenly.
“Then, communication to the people, investors and entrepreneurs need to be carried out so that they get a real picture of what they want to achieve.”
“In short, it needs to be consistent and realistic. Perhaps this is the way to attract the attention of foreign investors to buy stocks and bonds in Malaysia and if this happens continuously, then the Ringgit will recover in the coming period,” Dr Mohd Afzanizam explained.
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