SHRINKING RINGGIT: Most Malaysians feel the pinch as costs rise

Tuesday, 10 September 2013 04:59

© Malaysia Chronicle

MALAYSIA - The fall of the Malaysian ringgit to a 15-year low against the Singapore dollar has been a boon for Ms Cynthia Yong.

That's because the tax manager works in Singapore and sends $900 a month to her retired parents in Johor Baru.

"The past few years have not been so good for the ringgit because of inflation in Malaysia, and now there is the fuel-price increase.

So the stronger Singapore dollar helps," said the 28-year-old. Up until last week, the Malaysian ringgit was hovering at three-year lows against the US dollar, at about RM3.38 to the dollar.

It bounced up slightly - to RM3.32 - after Malaysia cut fuel subsidies as part of a larger effort to fix the economy.

While a weak ringgit is good for Malaysians like Ms Yong, for the two million foreign workers in Malaysia, the currency's recent gyrations are a mixed bag.

The ringgit actually strengthened against the Indonesian rupiah, the Indian rupee and the Nepalese rupee, so workers from those countries are smiling. But the ringgit is weaker against the Bangladeshi taka.

An Indonesian maid in Seremban, Ms S. Rasilawati, 32, said that though the rise of the ringgit is not much, "every little bit helps" as she remits her salary every two months to her mother and two children near Solo city.

The weak ringgit has affected everyone - from businesses that invest abroad, to families with children studying in foreign universities, to those who rely on imported goods and services.

The Malaysian government last Monday reduced fuel subsidies that will save RM1.1 billion (S$423.2 million) in the last four months of this year, and another RM3.3 billion next year. That helped push the ringgit to a three-week high against the US dollar.

More tough measures are expected when the government unveils the 2014 Budget next month, including an announcement on introducing a goods and services tax (GST) in 2015.

The public debate has now shifted from worries over the weak local currency to whether higher fuel prices and the coming GST will make life worse for ordinary folk.

ST