Depreciation of Ringgit not alarming, says Treasury

The depreciation of the ringgit is not alarming to prompt the government to take panic measures as other currencies are also in the same quandary due to unfavourable global development.

At 9.10 am, the ringgit declined to 4.3540/3600 against the US dollar from 4.3275/3325 yesterday.

Deputy Finance Minister Datuk Chua Tee Yong said the currencies of other bigger economies such Brazil and Turkey also weakened against the US dollar.

"If only the Malaysian currency is dropping while the rest is not, then it will be alarming," he told reporters at the launch of the Board of Valuers, Appraiser and Estate Agents' new office and the fifth edition of the Malaysian Valuation Standards (MVS) here today.

Chua said the decline of most global currencies was partly due to uncertainty of the US interest rate hike as well as the softening of oil prices.

"Oil is the barometer of the global economy. When oil price is low, normally the global growth will not be too good," he said.

He said the international forum for the governments and central bank governors from 20 major economies (G20) had also urged the US to take a clear stance on its interest rates hike to eliminate speculations.

All these uncertainties were only profiting the speculators, said Chua.

"We hope that once the US is certain in terms of increasing its interest rates, it (foreign exchange market) will normalise."

On the weaker ringgit's impact on the property market, he said this was a challenging time for developers, especially those with new projects as imported materials would be more expensive.

The current situation has also derailed consumer sentiments in the secondary market, resulting in a slowdown in price growth.

However, for foreign investors, the Malaysian property market seems cheaper now but that doesn't warrant the government to revise the minimum RM1 million property price eligible for foreign ownership as it does not contravene with local demand, he said.

"Most of the (local) demand is for properties between RM500,000 and RM1 million. That consisted of the bulk of purchases recently. So, I think the RM1 million figure is still relatively looking okay at this juncture," he said.