Exchange Rate in Malaysia
Malaysia - Exchange Rate
Ringgit falls to lowest level in over a decade
On 11 November, the ringgit traded in offshore markets dropped to its lowest level in in over a decade, following Donald Trump’s victory in the U.S. presidential elections. According to Thomson Reuters data, the ringgit’s one-month non-deliverable forwards lost 3.7% from the previous close to 4.54 MYR per USD, which was the weakest since September 2004. The sudden plunge was triggered by a large sell-off of emerging market government debt, as investors expect higher interest rates and reduced imports from Asia under Trump’s presidency. While Malaysia’s economic fundamentals remain solid—GDP accelerated to 4.3% in Q3—Trump’s proposed protectionist policies would affect investor sentiment in Asia’s export-led economies. Meanwhile, on the same day, the ringgit’s spot price settled at 4.29 MYR per USD, which weakened to a level last seen at the beginning of this year.
With the ringgit weakening, Malaysia’s Central Bank quickly intervened in the onshore market, making sure that the spot rate vis-à-vis the U.S. dollar remains stable. The Central Bank acknowledged the intervention and stated, on 11 November, that it will ensure that the markets do not price the ringgit out of sync with the economy’s underlying fundamentals, while also providing the necessary liquidity in the forex market.
FocusEconomics Consensus Forecast panelists expect the ringgit to trade at 4.12 per USD at the end of this year. For 2017, the panel projects the ringgit to trade at 4.10 per USD.
Malaysia - Exchange Rate Data
|Exchange Rate (vs USD)||3.28||3.50||4.29||4.49||4.05|
5 years of economic forecasts for more than 30 economic indicators.
Malaysia Exchange Rate Chart
Source: Thomson Reuters.
|Bond Yield||3.32||0.15 %||Dec 31|
|Exchange Rate||4.09||0.0 %||Jan 01|
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January 22, 2020
At its 21–22 January meeting, the Monetary Policy Committee of Bank Negara Malaysia (BNM) decided to lower the overnight policy rate (OPR) by 25 basis points to 2.75%, while the ceiling and floor of the OPR corridor were reduced to 3.00% and 2.50%, respectively.
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Consumer prices increased 0.9% over the prior month in December, up from the 0.1% rise in November.
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Industrial production gained traction in November, increasing 2.0% on an annual basis, up from the 0.3% rise in October which had marked a six-year low.
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The manufacturing Purchasing Managers’ Index (PMI), produced by IHS Markit, rose to 50.0 in December from 49.5 in November.
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Merchandise exports shrank 4.6% year-on-year in USD terms in November, moderating from the 7.5% decline registered in October.