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Malaysian ringgit posts biggest 2-day slide since 1997-98

by ChemOrbis Editorial Team -
  • 02/12/2014 (11:03)
According to media reports, the Malaysian ringgit has posted its biggest two-day decrease since the 1997-98 Asian financial crisis due to sharp declines in crude oil prices. Crude oil prices slumped by around $5-10/barrel to hit multi-year lows since the November 27 OPEC meeting, in which the cartel decided to maintain its oil production target at 30 million barrels/day.

The Malaysian ringgit retreated 2.5% in two days against dollar to reach 3.43 in intraday trading, posting the largest decrease since June 1998, according to data released by Thomson Reuters. Some analysts suggested that the ringgit could fall to 3.45 this week.

The country is one of Asia’s net oil exporters and a third of Malaysia’s state revenue is contributed from oil-related industries. In related news, state owned oil company Petronas will reportedly reduce its capital expenditures by 15-20% in the coming year. It was reported that the weaker currency will likely cause the government to miss their targets on lowering the fiscal deficit to 3% of gross domestic product in 2015 from 3.5%. Analysts reported that until oil stabilizes, the ringgit is at risk of further decreases.
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