Ringgit hovers close to 2.80 against Singdollar amid concerns over Malaysian debt rating

A money changer counts Malaysian ringgit banknotes for customers in Kuala Lumpur.
A money changer counts Malaysian ringgit banknotes for customers in Kuala Lumpur. PHOTO: AFP

SINGAPORE - The Malaysian ringgit has been hovering at about RM2.80 against the Singapore dollar over the past week.

One Singapore dollar could buy about RM2.79 on Tuesday, and analysts expect the currency to weaken further.

The ringgit has depreciated dramatically in recent months, falling about 6 per cent against the Singdollar this year. It has slipped to levels not seen against the Singdollar since at least 1981.

The Malaysian currency is under attack on multiple fronts - including concerns over state investment fund 1Malaysia Development Berhad's ability to pay its debt and plunging oil prices.

Malaysia is a major oil exporter so the price slump has hit revenue hard.

Market watchers are also concerned that credit ratings agency Fitch Ratings might downgrade Malaysia's sovereign debt rating.

Fitch has a negative outlook on Malaysia's existing "A-" rating and expects to review its numbers before the end of June.

chiaym@sph.com.sg