Malaysian ringgit falls to lowest level in 26 years

KUALA LUMPUR  —Malaysia’s ringgit hit its lowest level since the Asian financial crisis on Tuesday, as emerging Asian currencies suffered against the dollar.

In trade Tuesday the Malaysian ringgit fell nearly 0.3 percent to almost 4.8 against the greenback, its worst reading since January 1998 during the Asian financial meltdown.

The currency had suffered a more than 4 percent drop already this year, thanks in part to poor export performance and rising US interest rates.

Malaysia’s central bank governor Datuk Abdul Rasheed Ghaffour said Tuesday that the currency’s performance had been affected by “external factors” such as US rate hikes, geopolitical concerns and uncertainty about China’s economic prospects.

“The current level of the ringgit does not reflect the positive prospects of the Malaysian economy going forward,” he said in a statement.

READ: Malaysia’s economy likely grew 3.4% year-on-year in Q4 —gov’t

He said expected growth in global trade and Malaysian exports should have a positive impact on the currency this year.

The ringgit had previously hit its lowest point since the Asian financial crisis in 2016, when emerging-market currencies were hammered by capital flight fueled by an expected rise in US interest rates.

READ: Malaysia central bank to intervene in FX markets as ringgit losses ‘excessive’

Malaysia’s second finance minister Amir Hamzah Azizan told state news agency Bernama on Monday he expected the currency to strengthen against the dollar after US authorities signaled an end to rate hikes.

“Apart from that, all the hard work that the prime minister and finance minister… have done to bring in foreign direct investments will also play a part in strengthening the local economy,” he said.

“This will surely improve the ringgit.”