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Malaysian ringgit falls to lowest level in 26 years

KUALA LUMPUR (AFP) – Malaysia’s ringgit hit its lowest level since the Asian financial crisis yesterday, as emerging Asian currencies suffered against the dollar.

In trade yesterday the Malaysian ringgit fell nearly 0.3 per cent to almost 4.8 against the greenback, its worst reading since January 1998 during the Asian financial meltdown.

The currency had suffered an over four-per-cent drop already this year, thanks in part to poor export performance and rising United States (US) interest rates.

Malaysia’s central bank governor Datuk Abdul Rasheed Ghaffour said yesterday the currency’s performance had been affected by “external factors”.

“The current level of the ringgit does not reflect the positive prospects of the Malaysian economy going forward,” he said in a statement.

He said expected growth in global trade and Malaysian exports should have a positive impact on the currency this year.

The ringgit had previously hit its lowest point since the Asian financial crisis in 2016, when emerging-market currencies were hammered by capital flight fuelled by an expected rise in US interest rates. Malaysia’s second finance minister Amir Hamzah Azizan told state news agency Bernama on Monday he expected the currency to strengthen against the dollar after US authorities signalled an end to rate hikes.

“Apart from that, all the hard work that the prime minister and finance minister… have done to bring in foreign direct investments will also play a part in strengthening the local economy,” he said.

“This will surely improve the ringgit.”