Who would benefit from a stronger ringgit?
1. Traveller
Dear travellers, we have some good news! If you’re planning a trip abroad, this year might be one of the best times to do so. The ringgit is strengthening against many global currencies, meaning you’ll get more value for your money. It’s a great time to travel, as your budget will stretch further and make your trip more affordable.
Here’s how this benefits you:
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Better exchange rate: You can get more foreign currency for each ringgit, stretching your travel budget.
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Cheaper accommodation: You can enjoy an affordable hotel stays or splurge a little more on a nicer place.
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Lower cost for tour attraction: You would spend less on tours and activities, making it easier to enjoy everything on your dream list.
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Affordable meal and shopping: You don’t have to worry breaking your bank when you want to enjoy delicious meals and shop for souvenirs
With smart planning and budgeting, you can make the most of this great opportunity and create unforgettable travel memories. So, start packing and get ready to explore!
2. The Parents Supporting Their Children Abroad
To parents who sending their kids to study abroad, stronger ringgit would give you advantage. You’ll get more value for the money you’re sending them. Tuition fees, accommodation, and living expenses in foreign currencies will cost less when converted from ringgit. This can significantly ease the financial burden and make it more affordable to support your children’s education.
By taking advantage of a strong ringgit, you can provide better support for your child’s international experience without stretching your budget too thin.
3. Import-based industries- automotive, consumer, and airline industry
When the Malaysian Ringgit gets stronger, it's a win for import-based industries like automotive, consumer goods, and airlines. For the automotive sector, they would get cheaper imported cars and parts, which can cut down production costs and possibly lower car prices. But there's a catch—this can heat competition from foreign brands. So, local producers will have to get smart with their pricing to keep up.
Likewise, for the airline industry, a stronger ringgit will reduce operational costs for fuel, maintenance, and parts priced in foreign currencies. This could lead to more affordable flight tickets and cheaper aircraft purchases, making fleet expansions more feasible. Additionally, cheaper airfares can boost tourism, both domestically and internationally, as more people can afford to travel.
4. Local Investors who invest in the Malaysia market
For those Malaysians investing in our market, this is your moment to shine! A stronger ringgit usually means the economy is doing well, which can push up stock prices and give you better returns. It’s a good time to take advantage of the positive market trends.
Who Would Lose from a Stronger Ringgit?
1. Export-oriented industries - latex glove, oil & gas
While a stronger Ringgit may benefit many other sectors, it can be tough for export-oriented industries like latex gloves and oil & gas. This is because the price of their stuff goes up for buyers from abroad. So, demand for their products might drop, which could definitely hurt their business. If companies can’t sell as much, their profits take a hit, and they might struggle to keep things rolling. They might need to rethink their strategies to cope with these challenges.
2. Tourism Industry
Malaysia is one of the top destinations for tourists, but when the Ringgit strengthens, it can gradually reduce the number of visitors. This is because traveling becomes more expensive for tourists when the local currency rise. As a result, the tourism industry might take a big hit, especially since many tourist spots in Malaysia rely heavily on international visitors rather than locals.
Ultimately, this decrease in tourists can affect the economy as well, with fewer visitors spending money on travel, accommodations, and attractions.
Stronger Ringgit Isn’t Always Good for Everyone
So, while the ringgit’s recent strength is great news for many, it’s not a total win for us Malaysians. On one hand, it opens doors to cheaper travel and makes supporting loved ones abroad more affordable. On the other hand, it can make life tough for industries that rely heavily on exports and affect the tourism sector by reducing the attractiveness of Malaysia as a destination for international visitors. In some way, a falling ringgit can sometimes offer its own set of benefits to us.
Ultimately, while we hope for the ringgit to keep rising, it’s important to stay mindful of how these changes impact different sectors and individuals.
*The above article is intended for informational purposes only. Loanstreet accepts no responsibility for loss that may arise from reliance on information contained in the articles.
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