Ringgit records new low against Renminbi, affects traders with ties to China

Oriental Daily News, June 8, 2015

KUALA LUMPUR, Jun 8 – Malaysia-China Chamber of Commerce (MCCC) first vice president Tan Yew Sing said many businesses involved in the import and export of Chinese products are affected by the impact of GST implementation and the sank of Ringgit to a new low against Renminbi, with RM60 trading against CNY100.

He said in the past when Ringgit depreciates, the exchange rate of Ringgit against Renminbi maintained at RM57 against CNY100. But now the new low of RM3.77 against USD1 is at a worrying state.

He admitted that if Ringgit continues to plunge, the economic growth of Malaysia will be affected. The country’s goal of meeting the 5% GDP growth expectation would also be a difficult task.

“Both Malaysia and China have agreed to work together on reaching the targeted trade volume of USD160 billion by 2017, adding to that, as the rotating chairman of ASEAN this year Malaysia is expected to bring in more trade opportunities. However, with all these problems occurring, our effort of attracting foreign investment in China has become harder and the goal set earlier will be harder to achieve.”

Tan Yew Sing made the remarks above in an interview with Oriental Daily News today in response to the impact on Malaysian and Chinese businesses caused by the forex rate slump of RM60 against CNY100.

He mentioned that amid the unstable political and economic situation in Malaysia, it is hard to predict whether the exchange rate of Ringgit against Renminbi has dropped to its lowest point, however, if Ringgit continues to sink, the overall situation will be affected. It is hoped that the situation will be stabilized.

On the other hand, Prime Minister’s Department’s SME Bureau director Foo Seck Chyn said as an export oriented country, Malaysia and its exporters will actually benefit from the above situation, this situation however will affect the importers.

He said in the short term, the depreciation of Ringgit may increase prices of imported products in Malaysia due to the exchange rate factor. “The depreciation of Ringgit will lower the investment cost in Malaysia for foreign investors, this will attract more foreign investors to invest in Malaysia. However, the situation varies and depends on whether the business or corporation is export or import oriented.”

Original Source: 令吉兑人民幣创新低 与中国有贸易商家受衝击