The Malaysian ringgit declined slightly today and also posted its third weekly drop against the dollar this week as the emerging stock markets and currencies lived through one of the worst week with the oil, commodities and exports prices falling on the global recession outlook.
The ringgit hit its two-year low against the dollar today after the Asian stocks benchmark index fell to the lowest since 2003 and U.S. indexes followed it. Another factor that weighs on the ringgit is the export-orientated economy of Malaysia. With a third of the exports going to U.S., Japan and Singapore — countries, which consumption was heavily hit by the crisis, — the current-account deficit may badly influence the currencys position.
Some analysts believe that the current depreciation of the emerging currencies is caused mostly by the run-away to the safe-haven dollar. They expect that the central banks may prevent further decline of the national currencies by selling a part of their foreign reserves.
USD/MYR rose from 3.6200 to 3.6225 as of 8:05 GMT today after reaching its new 2-year maximum level at 3.6305 during the early Asian trading session.
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