Ringgit depreciates against US dollar an international phenomenon

The ringgit is headed for its biggest plunge since 2009 and the global phenomenon occurs after the weakening of the currency following the protracted slide in crude eroding oil-exporting revenues.

Almost all currencies against dollars have dropped, said Inter-Pacific Research Sdn Bhd head of research Pong Teng Siew, following opinions that the US. Reserve will likely increase its interest rates in the near future.

“Quite a number of currencies flow to the US which has inevitably strengthen the dollar value,” said Teng Siew when contacted by Astro AWANI, here recently.

“Of the 174 global currencies, only 18 currencies stand strong compared to dollar. The weakening of ringgit should be viewed as part of dollar strengthening cycle,” he said.

Teng Siew also added that the depreciation in ringgit could possibly be connected in the decline of crude oil which has not shown any signs of recovery.

“We should not expect the fuel prices to remain constantly low. It’s a weak cycle which will recover eventually. This is only temporary and I believe that it will recover in the near future,” said Teng Siew.

The ringgit is expected to be stabilised between three and six months soon after crude oil prices have recovered.

The currency fell to RM3.51 per dollar Friday morning, the steepest drop since September 2009 as crude oil is tagged at US$80 per barrel. On Monday, crude oil in the Brent market dropped below the US$55.66 level per barrel.

Investors and traders are understandably feeling the pinch and largely these sectors of the business community feel that Malaysian income will be affected and leads to negative sentiments in the market.