At 9am today, the local note breached the 3.50 mark, trading at 3.5026 against the Singapore dollar. It closed at 3.4887 yesterday evening.
As of yesterday’s close, the ringgit has dropped 6.55% year-to-date against the Singapore dollar from 3.2742 on Jan 3.
The Singapore dollar had surged to an all-time high against the ringgit last Friday as the latter was weighed down by weaker exports and its widening interest rate differential with the US. The ringgit closed at 3.4736 against the Sing dollar last Friday.
Bank Negara Malaysia (BNM) had paused interest-rate hikes in July, putting its overnight policy rate (OPR) at a record discount of 250 basis points relative to the upper bound of the Federal Reserve funding rate.
Yesterday, BNM governor Abdul Rasheed Ghaffour said the local economy is “not in a crisis” despite the ringgit hitting a new all-time low versus the US dollar.
While admitting the nation’s currency has hit levels seen when Malaysia was embroiled in the Asian Financial Crisis some 25 years ago, Rasheed said the country’s fundamentals and banking sector remain resilient.
He added that BNM is committed to taking all necessary measures to maintain a “smooth and controlled adjustment of the ringgit”.
According to Rasheed, the central bank possesses “an array of market measures” ready to boost the beleaguered ringgit, should the need arise. However, these measures were not disclosed.
Meanwhile, former treasury deputy secretary-general Ramon Navaratnam said the ringgit will decline “as long as there is little progress to improve our ways”.
“We are more interested in politics than economics,” he said, adding that unless the government institutes more reforms, “we could go down a slippery slope”.
“We need to be more open and supportive of real economic change with wider political backing. Our transformation is still not impressive enough – the market wants reforms,” Navaratnam, the former Transparency International Malaysia president, told FMT Business.
Pacific Research Center of Malaysia principal adviser Oh Ei Sun opines the focus should be on the ringgit being weak in general, rather than the low exchange rate of the ringgit versus the Singapore dollar.