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Crisis in Malaysia: Ringgit currency is heading towards all-time low

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Crisis in Malaysia: Ringgit currency is heading towards all-time low

The strong US dollar is just one of the factors that is causing problems for the economy of the country on the South China Sea. picture alliance/AP Photo | Vincent Thian

The Malaysian ringgit is on the verge of falling to a new all-time low, the Bloomberg news agency reports.

Persistently poor export figures and a strong US dollar are putting the currency under pressure.

According to “Bloomberg,” analysts are now giving hope: They are predicting an economic upswing in Malaysia and a rising value of the ringgit.

The steep fall of the Malaysian ringgit continues this year. As early as 2023, multiple crises around the world hit the Southeast Asian currency, especially China’s weakening economy. And Malaysia’s persistently poor export figures as well as a strong US dollar could now give the ringgit the final push to fall to a new all-time low, the news agency is currently reportingBloomberg“.

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Accordingly, the rate of the regional currency has lost a full four percent since the beginning of the year alone – two percent separate it from its lowest value to date in 1998. All the more problematic that, according to Bloomberg, Malaysia’s exports have been noticeably declining for almost a year. The entire region is in general economic distress. According to the agency, Malaysia is recovering worse than its neighbors in the Pacific. In the end, Malaysia’s entire economic growth suffers.

Analysts are hoping for an upswing in Malaysia

Political unrest in the elective monarchy and a positive development of the US dollar also darkened the outlook. In October, one US dollar was equal to exactly 4.7958 ringgit. As a result, if the value of the US dollar increases, the ringgit could depreciate proportionately. In this case, it would potentially fall below the previous all-time low of 4.8850 ringgit per US dollar from 1998.

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As “Bloomberg” writes, traders are now looking excitedly at the Malaysian Central Bank. It will decide whether it can maintain its interest rates, support the currency and resist the highfalutin dollar. Meanwhile, analysts gave hope: They predicted an economic upswing in Malaysia by the end of the year. According to experts, the ringgit will also stabilize and probably catch up against the dollar.

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