Ringgit gets weaker against the US dollar
The US is in a financial deep hole but it has continued to remain a safe haven. It is still regarded as the best exchange by the world, even as if its economy is near bankrupt.
The continued trading for the US dollar, unfortunately, has weakened the ringgit. Last week, the ringgit was at a three year low against the dollar when it closed at 3.7175. The ringgit has fallen 16% from the decade high of 3.13 hit last April, The Star reported.
The prediction is that the ringgit would weaken further and slid to the 3.80 level in the near term. Translated that means parents with children studying the US would have to fork out more money, our purchases of American products, such as computers, would be costlier and those having to travel to the US would be more expensive. For Malaysian factories, the cost of production would be heavier when bosses are already facing a slump in orders. The weaker currency is certainly not an advantage for exports, says manufacturers. It's another bitter blow.
But Malaysia is not an exception as other currencies have been hit as well. The good news is that our foreign exchange reserves is stable at US$91.1bil. The disturbing news is that while the dollar is an international currency, it is not comfortable to learn that printing more green backs is hardly rational economics.
