The Reality of the Falling Ringgit

September 7, 2015

COMMENT: I went to the local grocery in Phnom Penh to buy someDin MericanY food items three weeks ago, and proudly took out a RM50 note signed by Bank Negara Governor Zeti Aziz to pay for the bill of US 10 but the counter lady apologised for not accepting it. She asked me if I had Riels (Cambodian currency) or US Dollars. Of course I did.

But I was embarrassed all the same when she told me that she could not accept the Ringgit because she did not know what the exchange rate would be the following day. Ah, uncertainty is always a killer as in all things.

Then recently (September 1) at the Pochentong International Airport, Phnom Penh, when I arrived from Kuala Lumpur after a university business trip, which also enabled me to participate in Bersih 4.0, I exchanged RM50 to pay taxi charges  and I got US 10 Dollars. (1 US Dollar =5 Ringgit). For this kind of insult and hurt, I am expected to be grateful to Prime Minister Najib Razak, who is already infamous in Phnom Penh for his RM 2.6 billion corruption scandal.

Apandi AliNo way. In stead, he deserves to be removed unceremoniously from his 0ffice by the security guards, and then charged in our courts for corruption and abuses of power. For that to happen, we have to give the new Attorney-General Apandi  Ali the boot.

Prime Minister Najib has betrayed us with his failed economic policies. Many of us, businessmen and academics alike here, think he is bad for Malaysia and the sooner he disappears from politics  and resigns  his premiership , the better it will be for Malaysia. He is pure toxicity for our country, to put it mildly.

Fellow Malaysians brace yourself for tough times. Expect more taxes ahead since our Treasury is almost empty. Soon Prime Minister Najib in his capacity as Finance Minister is going to have to sell bonds to the EPF, Amanah Raya, Perkeso, Tabung Haji, PNB,  and the local banks forcing interest rates to rise, if he cannot raise new taxes.

Crony contractors can expect to be paid late. Retailers will have to downsize and retrench staff since sales have dropped by at least 40 per cent compared to 2014. Government servants should also wake up since the Najib government will not have the money to pay their salaries and allowances on time. This is the price these “saya yang menurut perentah” (I obey orders) types have to pay as accomplices to his mismanagement of our economy.–Din Merican

The Reality of the Falling Ringgit: Everyone feels the pinch except the Politicos

by Kalpana M@www,

Najib TerokHis Economic Policies are hurting us

While Malaysians are grumbling about the sharp fall in the value of the ringgit, foreigners who are working in this country are likewise feeling the pinch.

Fueled by the fall in crude oil prices and political uncertainty, the ringgit has lost almost 30 percent of its value compared to a year ago, now at around RM4.2 to 1 US dollar – its lowest since 1998. This is worrying enough to many Malaysians – even without considering the implementation of the Goods and Services Tax (GST) – but for foreigners who need to send money overseas, the problem is worse.

An estimated 2.3 million foreigners are working in Malaysia and they too have to tighten their belts. Genevieve F Dipolog-Ubanan, a 53-year-old English language assistant professor at a local university, said that she has had to make many changes in the face of the fallen ringgit.

She came to Malaysia from Mindanao, Philippines, at the encouragement of a friend who was working at the same university. When she arrived three years ago, a ringgit could buy around 13 pesos. Now it is only worth 11 pesos.

“Before GST and the ringgit depreciation, my shopping bag was a lot heavier from a RM150 shopping trip.I used to send half of my salary to my two sons in the Philippines, but after (the GST and the falling of the ringgit), I send two-thirds of my salary instead.

“Before, I would send them RM3,000, but now I have increased it to RM4,500,” she added.

She says that her sons are aware of the state of the Malaysian economy and her parents and siblings have advised her to return to the Philippines.

I’d leave, if not for contract’

The Sick RinggifThe Sick Ringgit

Yin, a 45-year-old lecturer, would be considering the same option but she has to serve her contract.

“I have to bear it, because I am committed to my degree programme and it would be unethical to quit now,” said the medical doctor who only wanted to be known by her surname.

She hails from Yangon, the former capital of Myanmar, and said that the exchange rate between the ringgit and the Burmese kyat has fluctuated, making it necessary for her to cut back spending.

“I need to send about 40 percent of my earnings home because I am in the process of building a house for my mother.

“My husband lives in Canada, so he is not affected.However, we’re paying for a mortgage in Canada, which I need to pay a bit of, and that is affecting me more than it affects him.Every country has some sort of tax to pay, so the GST does not bother me that much.The ringgit, however, is worrying,” she said.

Yin and Dipolog-Ubanan have both had to trim down their expenses in Malaysia in order to send home a more or less fixed amount of money in their home currency.

Blue collared workers less hit

Interestingly, the fall of the ringgit has been less of an issue for blue-collar foreign workers compared to professional expatriates, as their families tend to accept any amount of money without question.

Sundari, 47, is an Indonesian who has been working as a domestic helper in Petaling Jaya for the past 15 years. She said that out of her monthly pay of RM1,000, the amount of money she sends home fluctuates, depending on her expenditures for the month. “Sometimes it’s RM700, sometimes it’s RM500. I send to my three children, and they quietly accept whatever I give them.They have jobs so they do not depend on me,” she explained.

Another Indonesian domestic helper, who only wanted to be known as Sri, said the same even though she has three family members. “I don’t think they have noticed much of a change,” she said. However, she noted that the fall of the ringgit was a relatively recent phenomenon, and that it may be too soon to tell if those receiving money from outside the country will start to feel the pinch.

Lifestyle changes required

For certain, Malaysians who have sent their children overseas are already feeling the pinch. Raymond Chan Fook Kong expects a significant increase in spending on his daughter’s education by the time she starts her third year at university.

The 57-year-old – a Malaysian whose daughter studies in the United Kingdom – said that he has had to fork out an extra 20 percent compared to before to maintain the amount of British pounds he has allocated for his daughter.

“The combination of GST and depreciation of the ringgit is a double whammy. I have noticed a change in my disposable income,” he said.

This has translated to changes in the lifestyles of both parents and child, as Chan has advised his daughter to watch her spending. “If the ringgit does not rise soon, we will have to continue to be thrifty and defer expenditure on durables like cars and renovations for the house.“We need to save for a rainy day,” he said.

16 thoughts on “The Reality of the Falling Ringgit

  1. The severe situation here will only sink in for each and every one of us when it hits our pocket, that’s the harsh reality. To what extent this will galvanise the masses to change things … that’s left to be seen

    For Najib and his cronies, they are still living in their dreamland because they do not need to spend any single sen from their own pocket. How long do the taxpayers want to continue paying for these scums?

    They treat the laws of Malaysia with utter contempt while we the law-abiding citizens are looking for the legally acceptable way to get rid of them. There is no level playing field from the start. So, would we ever be able to get rid of this scourge?

  2. A friend from overseas unfamiliar with Malaysian politics asked me about the whole scandal of 1MDB and the RM2.6b “donation”. After explaining it to him, he asked Is your PM King? I REPLIED NO BUT UMNO IS KING..

    I then realized that is what Malaysia has turned out to be, from a monarchy system of a group of kingdoms, we have become a country ruled by a political party that is KING – rule, laws, institutions means nothing, their words is law. The different personalities and leaders just represents the different part of King-rule – its pretty crazy king in fact, suspicious, insecure, scheming, self-absorbed, malicious when threatened or ambitious, but also at one time, benign and generous to a fault, etc.

    If you think about it, if a person has such characteristic, he would be described as ANTI-SOCIAL..And that is the truth about UMNO – its an anti-social pathological political party.

    Falling currency? All pathologically run Kingdom, even by a group that makes up that Kingdom, eventually fails with falling currency..

  3. Din,
    But if you produce SGD50, that girl would gladly accept it. Anyway, seriously, like what Hisham Rais has advocated, we must change our flags and national anthem. If that Rais Yatim can pay honour to Zubir Said who composed Majulah Singapura. Why not? Just take out Singapura and put in Malaysia. The lyrics are far more meaningful than just tanah tumpah darahku la……….rakyat hidup bersatu dan padu…….2 stupid liners…..Unlike Zubir Said’s majulah singapura/malaysia lyrics……Just listen la…….

  4. We need to do what the Guatemalans did to their (ex)president.
    Be inspired by peaceful change at the very top in Nigeria
    Malaysia .. how? What is it 55 yrs of the same lot ?
    if not corrupt they would be bored with serving the people !

  5. Hat Low, what serious? Can you or anyone here make changes or instill seriousness into our present government? Anyway, all we do here is venting our frustration until our hairs turn white. Come next election we voted them in again. So, are we all serious?

    Why not just relax, enjoy the posting so that our days can pass a little better. Do have some sense of humor.

  6. @vic September 7, 2015 at 12:59 pm,

    I agree. What difference does it make even if you appear serious NOW??? What can you do NOW to change things? May be we must be serious in our voting at the GE14 to the extent that no amount of cheating will defeat our wishes……

  7. Maybe the printing machines are already running and into QE5 (after QE 1 -4 had been used to print to pay for USD). Brace yourselves as there is no paracute.

  8. The Reality of the Falling Ringgit

    The leaders and their economic advisers [who take their fees in US$] say this is good for the economy and the country as there will be more tourists and exports will rise as Malaysian goods will be cheaper. Further locals will not go overseas for holidays or send children to foreign universities and this will further benefit the country.

    Unfortunately it is a common perception that the leaders and their families spend more time overseas under the guide of ‘working visits’ when the reality could be that they are there for shopping and meeting local leaders or Malaysians or trade organizations may be more of the excuse.

    The children of leaders study overseas to be proficient in English and all on rakyat’s expense so that they can inherit the leadership posts from their parents. This may also apply to those who are sent overseas for purposes of ‘studies’ at rakyat’s expense and none of them are adversely effected by the falling ringgit value as losses are borne by the rakyat while when the ringgit was strong they continued to benefit personally. Losses by Rakyat and Profits by Individual.

    The educated [not literate] youths are questioning the leadership who is not comfortable with the educated Gen Y as they want followers who follow blindly and not question.

    Better not to ‘educate’ the youth but make them ‘literate’ in local educational institutions if the leadership wants a compliant youth who do not question but follow blindly and accept without question the ‘unacceptable and unreasonable’ answers of the leadership for their actions,

  9. For my experience and opinions, USD against Ringgit may fall to at least 6. If you think is impossible, pls review 97 financial crisis, in term of economic structure, foreign reserve, trade account and etc, 97 is better than now yet we can’t stand the foreign fund attack our ringgit. You can imagine, how bad is the situation we experiencing now. Show have not yet start, it just a trailer.

    God bless us.

  10. If Ringgit really falls to 6.00, then we will be deep shit. Our currency then will no longer be accepted by most nations. It will be like the banana money that we used during the Japanese occupation.

  11. If Malaysia’s economic policies have “failed” we have plenty of company. The fact of the matter is that we’re in the middle of a global USD shortage and facing a commodity price crash at the same time. In that sense, the Ringgit’s drop is performing the floating exchange rate’s proper function of acting as a shock absorber for the real economy in the face of a terms of trade shock. I find the article is at best one-sided.

    No mention, in the lady lecturer’s case, that CADMYR has barely budged in two years (i.e. the Canadian Dollar has dropped just as much as the Ringgit against the USD). In the Indonesian maid’s case, no mention that the Ringgit is up 15% on the Rupiah over the last two years. In the last example, no mention that only 25% of Malaysian students overseas are in the UK and the US, which are the currencies against which the Ringgit has really lost ground on. If your child studies in Australia (also about 25% of the Malaysian overseas student population), you’d be looking at about a 10% reduction in costs over the last two years. The case of the Filipino lady is the most appropriate, but the Philippines has been the best performing economy in ASEAN over the past two years (plus, they have no oil).

    By my estimate, only about 7% of the Ringgit’s drop against the USD has been due to domestic factors – more or less about 10sen-15sen worth. Changing leadership will resolve nothing.

    I’d also note in passing that the last vestige of our 1998 capital controls – non-covertibility of the Ringgit overseas – remains in force today. Foreigners who accept Ringgit overseas are actually taking on a considerable risk, since unlike other currencies they cannot exchange Ringgit into other national currencies within their domestic banking systems.


    I lived through 1997-98 and have studied the episode extensively. We’re miles off better today than we were then. There’s no comparison.

  12. the liar blogger in action.. proudly declared he was one of BERSHITTY devoters… so we could justify how their minded and voice of shouting.. ohh no malaysian gone this bad because some portion of rakyat.. the so-called ‘cerdik’ one.. got their professorship from university of PR via those ‘subjects’ published by MalaysianInsider, Malaysiakini.. textbook.. hmmm.. gud… see how they will ‘change’ this country through out PAN.. see their MPs in action.. do they think about rakyat ??? or just everyday manipulating usd700 derma entire decade.. political mileage things..??? so this how our ruling govt had.. sucks unreliable opposition..

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