According to a local dealer, the ringgit has depreciated to level of 3.877 is in line with regional currency weakness buoyed by persistent outflow of major funds out of Asia in preparation for the imminent rate hike in the US which
KUCHING: The ringgit has further dropped to another 17-year low yesterday despite a rise in Malaysia’s exports by five per cent which economists say “defied forecasts” of a 2.2 per cent decline.
According to Bloomberg, the ringgit continues to declined 0.6 percent to 3.8765 against the greenback as of 1.18pm. It earlier fell to 3.8787, the lowest since since September 1998 when it reached 3.9340, it said.
According to a local dealer, the ringgit’s drop is in line with regional currency weakness buoyed by persistent outflow of major funds out of Asia in preparation for an imminent rate hike in the US which he expected to be in September.
“I rather think major economic factors are weighing down on the ringgit, coupled with uncertainty on domestic political scene which is not helping the currency either,” the dealer said, who declined to be named.
“If the outflow of major funds continue in this region as the US dollar continues to strengthen, we mostlikely will witness weakness across Asean’s basket of currencies, including ringgit.”
This came on the back of Malaysia’s total trade in June 2015 increasing five per cent to RM64.26 billion compared with 61.23 billion recorded in the same month last year.
The trade surplus was recorded at RM7.98 billion, said the Ministry of International Trade and Industry (MITI) in its Malaysia External Trade Statistics reports.
MITI also said the five per cent growth was the fastest in 12 months.
“It is an endorsement of Malaysia’s status as an open trading economy and testament of the resilience of the country’s trading sector amid the crisis in the Eurozone and the uncertainty in China,” it said in a statement.
It said imports decreased 1.5 per cent to RM56.28 billion while trade grew 1.9 per cent to RM120.54 billion.
“Increases in trade were recorded with Singapore which rose RM317.2 million, Thailand (RM406.6 million), Vietnam (RM378.8 million), Kuwait (RM577.2 million), Hong Kong (RM529.6 million) and the Philippines (RM96.8 million),” said MITI.
For the six months period, Malaysia’s total trade decreased 2.9 per cent to RM694.98 billion compared with the same period last year while trade surplus eased seven per cent to RM41.69 billion.
“Exports were lower by 3.1 per cent to RM368.33 billion while imports declined 2.6 per cent to RM326.64 billion,” it said.
MITI said trade with the free trade agreement partner countries expanded 63 per cent to RM437.56 billion, with exports valued at RM232.1 billion while imports were worth RM205.46 billion.
“Trade with Asean fell 2.3 per cent to RM189.48 billion with exports and imports valued at RM103.84 billion and RM85.64, respectively, which accounted for a 27.3 per cent share of total trade.
“Higher exports to Asean was contributed by electrical and electronic products, crude petroleum, chemicals and chemicals products, as well as machinery, appliances and parts,” it added.