RM4.17 to USD1: Malaysian Ringgit Weakens to Lowest Level in 23 Years

The Malaysian ringgit has fallen to its weakest level in 23 years against the US dollar, closing at RM4.17 to USD1 on Tuesday, July 19, 2022. This marks a significant depreciation of the ringgit, which has lost over 7% of its value against the US dollar since the beginning of the year.

The weakening of the ringgit is primarily due to a combination of factors, including:

• Rising US interest rates: The Federal Reserve has been raising interest rates aggressively in an effort to combat inflation. This has made the US dollar more attractive to investors, leading to a flight of capital from emerging markets like Malaysia.
• Strong US economy: The US economy has been performing well, with strong job growth and low unemployment. This has made the US dollar more valuable relative to other currencies.
• Weak Malaysian economy: The Malaysian economy has been struggling in recent months, with GDP growth slowing and inflation rising. This has made the ringgit less attractive to investors.

The weakening of the ringgit has a number of implications for Malaysia. It will make imports more expensive, which could lead to higher inflation. It will also make it more difficult for Malaysian businesses to compete in the global market.

The Malaysian government is taking steps to address the weakening of the ringgit. The central bank has raised interest rates and implemented measures to curb capital outflows. The government is also working to improve the country's economic fundamentals, such as by reducing the budget deficit and increasing foreign investment.

Despite the government's efforts, the ringgit is likely to remain weak in the near term. The Federal Reserve is expected to continue raising interest rates, and the US economy is expected to remain strong. The Malaysian economy is also facing a number of challenges, such as rising inflation and slowing GDP growth.

Table 1: Malaysian Ringgit to US Dollar Exchange Rate

Table 2: Factors Affecting the Malaysian Ringgit

Table 3: Implications of a Weak Ringgit

Table 4: Government Measures to Address a Weak Ringgit