THE VALUE OF THE

RINGGIT FALLING
CREATED BY: KIRTHANA,
DARSHINI,PAVISHAA,VALARMAT
HI AND MAITHURI

INTRODUCTION

before closing on 3 Dec 2014, the ringgit dropped to as far 3.4455

in the 1st quarter of 2015, the ringgits value continued to weaken

on 8 June 2015, the ringgit dropped to 3.7743

On

9 June 2015, fell to lowest value against the Singapore Dollar

on 6 July 2015, the ringgit had dropped to its lowest level in 16 years

on 12 Aug 2015, the ringgit fell to Rm4.0025 against the dollar

HOW BIG WAS THE DROP AND WHEN DID IT

START

the ringgit started falling in late 2014.

on 1 Dec 2014, falling 2.4% to 3.4300 to the US dollar

on 12 June 2015, the ringgit had dropped for 4 consecutive

weeks

the ringgit has become Asias worst performing currency

last year, 2nd worst performing currency in the region

investors continue to scale down their exposure to Malaysia

assets

ISSUES

Firstly, the lower value oil .

Oil is one of Malaysias main exports

declining price of Brent crude oil of 38%

Secondly, Malaysias 1MDB debt have gained global

attention

In July 2015, media reports that our PMs personal accounts

were involved in the transfer of USD700 million of 1MDB

Thirdly, prospect of the US increasing its interest rates.

WHAT CAUSED THE DROP IN OIL PRICES?

the supply has been exceeding demand

the price of Brent crude oil has now fallen to a 4 year low

OPEC, has so far declined to cut back on its production of oil

WHAT ARE THE PREDICTION FOR THE

RINGGIT?

ringgit forecast from 3.38 per dollar to 3.49 per dollar

the ringgit would continue to fall until oil prices stabilize

June 2015, central bank governor DR Zeti Aktar Aziz

believed the weakening currency to be a short term problem

on 19 June 2015, ringgit pulled back against the US dollar

,its value rising 3.7050 per dollar

In July 2015, the Financial Times reported that some banks

have predicted the ringgit will sink as low 3.38

HOW DOES THE FALLING RINGGIT AFFECT

MALAYSIAS CURRENCY RESERVES?

Large amounts of currencies held by governments as part of

their foreign exchange reserves

examples, paying for imports and paying off foreign

currency debts

pricing currencies for globally traded products

countries will keep different reserve currencies

US dollar is a dominant reserve currency

WHY ARE MALAYSIAS RESERVES FALLING

RIGHT NOW?

Bank Negara Malaysia has been intervening to help slow

down the rate
by buying and selling foreign reserve currency

example slump oil prices and US interest rate

1MDB scandal are also affecting investors confidence

POSITIVE ANS NEGATIVE EFFECTS OF THE

RINGGITS FALL

Increased price of goods and services

GST imposed on the things you love

Increased cost of imported goods will be reflected on price tags

Disdain over the price imported fresh goods

Inflation

cost of imported goods will increase as mentioned early

Domestic product forced to sell their goods on high price

CONTINUE.

Reduced purchasing power

when the price of goods and services increase, but your income is not

increased cost of goods does not permit you to spend freely

Exports growth

international markets will find weak ringgit beneficial as they enjoy higher
sales volume

Tourism boost

weaker ringgit as it grants them a higher purchasing power

Singaporeans who enjoy a quick gateway to Malaysia would like be the prime
benefit

For foreigner, there is no better time to visit Malaysia as the weak ringgit
gives you more value for your money

CONCLUSION

Many Singaporeans might be delighted because their

weekend shopping trips to neighbour JB are now cheaper.

weak Malaysian economy is bad news for Singapore as our

largest trading partner.

Malaysias

easily

problem are deep rooted and will not be solved