Crude prices drops might cause the MYR to drop to levels last seen during the Asian Financial Crisis.
The Malaysian ringgit is reportedly falling to levels last seen during the Asian Financial Crisis, which occurred more than 20 years ago, as the price of petroleum and palm oil declines.
According to emerging markets strategist Galvin Chia, who was quoted by Bloomberg today, a huge potential outflow of Malaysian portfolios combined with risk-averse investors might cause the ringgit to move toward 4.50 against the dollar.
The ringgit’s value against the dollar is reportedly getting closer to 4.5002, which was last reached in January 1998. The ringgit’s value dropped to 4.4810 per dollar last Friday, the lowest level since January 2017.
Any further declines in crude oil prices could push the ringgit down as well, according to a foreign exchange strategist at Scotiabank in Singapore.
This is true despite the alleged growth in Malaysia’s exports of raw materials this year.
According to reports, Goldman Sachs Group Inc. analysts theorised that this gap may be caused by certain businesses maintaining their export earnings in foreign currencies.
