COMMENT | Is the ringgit really that weak?

COMMENT | There have been many and varied comments made on the decline of the ringgit and its reasons, with the perplexing question being the weakness of the ringgit given a rosy economic outlook which predicts growth of 5-6% and a strongly recovering economy.

But is the ringgit really weak?

The surprising answer to the question is that the ringgit is not really weak but the US dollar is strengthening against almost all currencies. That has important implications for monetary policy at Bank Negara Malaysia and the question of whether interest rates should continue to be increased.

But first let’s look at the movement of the ringgit. The table below gives the movement of the ringgit against selected currencies for this...