ZCZC
BCN-35
MALAYSIA-RINGGIT-FOREX
Malaysian Ringgit falls amid Turkish Lira crisis
KUALA LUMPUR, Aug. 13, 2018 (BSS/Xinhua) – Malaysian Ringgit has fallen to
another lowest level this year on Monday as the sharp drop in Turkish Lira
raises concerns over emerging market currencies.
The Ringgit opened at 4.0925 lower against the greenback on Monday
morning, and declined 0.18 percent to 4.0933 at afternoon. Year-to-date, the
Ringgit has fallen 1.1 percent against the U.S. dollar.
“With the Lira experiencing a high risk of a potential crisis, the risk on
the Ringgit is moderately high compared to countries like Argentina, Brazil,
and Mexico,” AmBank Group Research said in a report Monday.
According to its assessment, the Ringgit is fairly well correlated with
the Lira, which is around 79 percent.
“From our assessment, for every 1 percent drop in the lira against the
U.S. dollar, the impact on the Ringgit is about 0.04 percent in an immediate
note and 0.01 percent in lag one period, suggesting the combined effect on
average is around 0.025 percent,” it said, adding that over a longer period,
the impact is about 0.18 percent.
The research house also highlighted the vulnerability on the Ringgit is
partly due to Malaysia’s high public debt of about 80 percent of Gross
Domestic Product (GDP), gross financing that needs around 10.4 percent of GDP
and about 8 billion U.S. dollars maturities coming in 2019.
Hence, with its view that the U.S. dollar will exhibit a strengthening
momentum in 2018 and the Japanese yen benefiting from the safe haven status,
AmBank Group projected the Ringgit to stay around 4.08 to 4.10 against the
U.S. dollar with a 2 percent to 3 percent swing this year.
BSS/XINHUA/HR/1300