KUALA LUMPUR (Aug 15): The Malaysian ringgit has better prospects of retracing its value once Turkey's geopolitical uncertainty and financial crisis subsides, says Sunway University Business School Economics Professor Dr Yeah Kim Leng.
He said that the local unit's depreciation against the US dollar, which was also the case with emerging currencies, was only temporary as Malaysia had little exposure to the Turkey financial crisis, given the country's improved account surplus.
“Being an oil exporting nation makes us stronger, hence we can withstand surrounding pressure,” he said, adding that Malaysia was less exposed (to the turmoil) compared with Mexico, Argentina. Philippines, Indonesia and India, due to the difference in terms of leveraging over foreign borrowings.
“Most of our borrowings are in ringgit and this will cushion us from a greater impact of the US dollar strengthening,” he told Bernama today.
The lira plummeted to a record low of 7.24 to the dollar at the week's start, rattling global markets as tension increased between the United States and Turkey over Ankara's imprisonment of a pastor and other diplomatic issues.
As of 3pm, the ringgit reached 4.1020/1050, an eight-month low compared with yesterday's close of 4.0950/1000.
Meanwhile, the Indian rupee also slipped to a fresh record low on Monday, at 69.93 a dollar, its steepest fall since Sept 3, 2013.
As for the Indonesian rupiah, it had fallen three consecutive days against the dollar to 14,618, the lowest since October 2015.
This was due to the risk of a contagion from Turkey’s financial-market turmoil that has affected emerging markets. — Bernama