Weaker ringgit hits Malaysia consumers and businesses hard

Importers are facing rising prices, while households are scrapping overseas holidays

- Hazlin Hassan

 

A sharp downturn in the fortunes of the ringgit, which hit a near-record low against the US dollar and reached an alltime low against the Singapore dollar in October, has sent jitters through Malaysian households and businesses alike.

The ringgit has been hovering at 25-year lows in recent weeks, hitting almost 4.8 to the US dollar last month, the lowest since the 1998 Asian financial crisis, when it hit a historic low of 4.885 to the greenback.

The Singapore dollar surged to 3.5086 against the ringgit on Oct 24. It first breached the 3.5 mark on Oct 23, according to Bloomberg data.

The latest slump has sparked concern among Malaysians, many of whom curtailed overseas travel plans and now have to spend more when buying imported goods.

The ringgit has since recovered to 4.72 per US dollar.

Housewife Melissa Lim, 45, from Kuala Lumpur said her family had planned to holiday in Singapore, but scrapped the idea due to the unfavourable currency exchange rate for the ringgit.

"It is very expensive. One night's stay will cost us at least RM1,000 (S$288) for four people," Madam Lim told The Straits Times.

Apart from travel, Malaysians also have to fork out more on items such as food due to the ringgit's slide. Food prices in Malaysia climbed by 3.9 per cent year-onyear in September.

Adding to inflationary pressures, owners of small food businesses have had to raise prices due to the soaring cost of ingredients in a country which is a net importer of food, purchasing some RM79 billion worth of foreign food items in 2021.