The Malaysian ringgit is likely to stay weak in the first six months of 2024 as the country grapples with China’s weak economy, a strong US dollar, and delayed economic reforms at home. But finally, the currency seems to have bottomed out, analysts say.
On 20 February, the ringgit fell to RM4.7965 against the US dollar, its weakest level since the 1998 Asian financial crisis.
The currency also hit an all-time low of RM3.56 against the Singapore dollar the same day.
“The ringgit’s weakness will be temporary and will gradually start to fade off after certainty on when the US Federal Reserve will cut interest rates and a recovery in China’s economic growth in the second half of 2024. But this may require patience,” OCBC Bank currency strategist Christopher Wong says.
Like other analysts, Mr Wong is banking on a gradual recovery in Malaysia’s exports, driven by an anticipated demand for semiconductors, and the economic rebound of the country’s largest trading partner, China.
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