Most Malaysians feeling the pinch as expenses increase
By Reme Ahmad Assistant, The Straits Times/Asia News NetworkKUALA LUMPUR -- The fall of the Malaysian ringgit to a 15-year low against the Singapore dollar has been a boon for Cynthia Yong.
September 9, 2013, 4:06 pm TWN
That's because the tax manager works in Singapore and sends SG$900 (US$706) a month to her retired parents in Johor Baru.
“The past few years have not been so good for the ringgit because of inflation in Malaysia, and now there is the fuel-price increase. So the stronger Singapore dollar helps,” said the 28-year-old.
Until recently, the Malaysian ringgit was hovering at three-year lows against the U.S. dollar, at about 3.38 ringgit to the dollar. It bounced up slightly — to 3.32 ringgit — after Malaysia cut fuel subsidies as part of a larger effort to fix the economy.
While a weak ringgit is good for Malaysians like Yong, for the 2 million foreign workers in Malaysia, the currency's recent gyrations are a mixed bag.
The ringgit actually strengthened against the Indonesian rupiah, the Indian rupee and the Nepalese rupee, so workers from those countries are smiling. But the ringgit is weaker against the Bangladeshi taka.
An Indonesian maid in Seremban, S. Rasilawati, 32, said that though the rise of the ringgit is not much, “every little bit helps” as she remits her salary every two months to her mother and two children near Solo city.
The weak ringgit has affected everyone — from businesses that invest abroad, to families with children studying in foreign universities, to those who rely on imported goods and services.
The Malaysian government last Monday reduced fuel subsidies that will save 1.1 billion ringgit in the last four months of this year, and another 3.3 billion ringgit next year. That helped push the ringgit to a three-week high against the U.S. dollar.
More tough measures are expected when the government unveils the 2014 Budget next month, including an announcement on introducing a goods and services tax (GST) in 2015.
The public debate has now shifted from worries over the weak local currency to whether higher fuel prices and the coming GST will make life worse for ordinary folk.