The national currency of Malaysia, ringgit, is getting weaker amid the political instability and coronavirus fears. Analysts further predict that the weakening will continue.
Gerald Ambrose, chief executive officer at Aberdeen Standard Investments Malaysia, argued that the Malaysian ringgit will get weaker the economy is going the same way. Nevertheless, he was not able to tell to which point it will fall.
“Malaysia, after a little bit of a recovery last year, does appear to be … one of the sick men of the region. I don’t know how much weaker it can go. I don’t know how much a weaker currency will actually help the economy,” he elaborated.
Since the beginning of the week, Malaysia has been witnessing the weakening of ringgit against dollar. The last trading shows Rm 4.235 per dollar, slightly getting than last week’s below Rm 4.17.
Concerning the condition, Bank Negara Malaysia (BNM) said on Monday that it was ‘closely monitoring conditions in the financial markets.’ Though ringgit will follow market’s orientation, BNM will still ascertain sufficient liquidity and orderly financial market conditions to secure the currency.
Malaysia: Political Turmoil and Coronavirus Contribute to Weakening Ringgit
Malaysia is entering a conflicting period as it has to sustain various internal and foreign affairs, such as the political drama and coronavirus outbreak. Furthermore, the country is apparently not ready now.
With the previously PM Mahathir resigning, the country now has neither cabinets nor effective PM. The king addressed the issue by appointing Mahathir to be an interim PM while the country is trying to vote for a new one.
Additionally, the political situation just reveals another surprise that many analysts do not expect before. Pakatan Harapan, reportedly pledging its supports towards Mahathir, just announces that it nominates Anwar, Mahathir’s political rival, to be the next PM.
However, that is not the only notorious issue Kuala Lumpur is currently facing. With currently having no health minister, there will possibly be a hard coordination to combat coronavirus.
The country so far reported 22 cases of coronavirus, with 20 of them have fully recovered. That said, what’s next is most likely a rough journey of prevention and recovery, without a health minister. The country needs a full coordination.