KUALA LUMPUR — These days there is somewhat of an upbeat economic mood in Malaysia, although it is still far from a booster shot to the Malaysian economy in general. The Malaysian ringgit has been wallowing in the doldrums over the past year, sauntering close to or even beyond its lowest exchange rate against the US dollar (during the Asian financial crisis at the end of the last century), with a somber forecast for its currency value.
But almost all of a sudden, the ringgit swung up strongly against the dollar by almost 10 percent. This recent appreciation in the value of the ringgit is viewed quite positively by many circles in Malaysia and beyond. But to put it more squarely, the ringgit rise mainly reflects the weakness of the US dollar, rather than significant progress in structural reforms in the Malaysian economy. More generally, the so-called fluctuations in the value of various currencies around the world are mostly relative to the US dollar, which is the world’s leading trading currency. The recent appreciation is not exclusive to the ringgit; many currencies in emerging markets have also risen. In other words, it is not as if the ringgit is unique in its recent appreciation.
