Ringgit slides to new low of RM4.50 against US$ since 1998

The Malaysian ringgit slid to a new record low of RM4.5002 against the US dollar since the 1998 Asian financial crisis.

According to data from Bloomberg, the ringgit crossed the RM4.50 psychological mark at 11.20am.

The exchange rate provided by Bank Negara showed the selling price of US$1 is RM4.5010 as of noon.

The ringgit hit the lowest point at RM4.88 to US$1 in January 1998.

Then-prime minister Dr Mahathir Mohamad subsequently moved to peg the ringgit at RM3.80 against the US dollar.

Malaysia lifted the peg in 2006, which immediately saw the currency appreciate against the US dollar.

It achieved a peak monthly average of RM2.987 against the US dollar in August 2012.

However, the ringgit began to weaken in 2013 and by July 2015, it had fallen past the pegged level of RM3.80.

Meanwhile, BMI Research said it expected the ringgit to weaken further in the near term but believe the average for 2017 will hover around RM4.50 against the US dollar.

"We expect the Malaysian ringgit to weaken further in the short-term amid technical weakness and rising US rate hike expectations.

"Over the longer term, an undervalued real effective exchange rate and improving terms of trade due to rising commodity prices will provide support.

"As such, we forecast the ringgit to average RM4.50/US$ in 2017 and RM4.40/US$ in 2018," it said in a statement. -Mkini