Over the last six months, most countries have seen their currencies decline against the US dollar. Malaysia has seen a steeper drop than most, with the currency’s shedding over 10% of its value against the US dollar since August of last year. As an overall net exporter in the oil and gas sector, the ringgit has been further hurt by falling oil prices.
There are also concerns that the country’s sovereign debt rating may be downgraded, which would impact foreign investors, potentially weakening the ringgit yet further. The central bank has not done much to fight the decline, which some see as a deliberate policy to reduce the impact of falling oil prices. The ringgit is not expected to strengthen significantly in the near future.