More importantly, they have restructured their banking and financial systems, and have accumulated adequate levels of foreign reserves,” he points out. “The currency crisis in the 1990s stemmed from the individual country’s vulnerabilities as well as economic and financial weaknesses, especially their overdependence on foreign capital. “When the Fed holds off on its interest rate increases, only then can we see some normalcy in the currencies. If there were a crisis, our currency would depreciate sharply against all the other currencies,” says Yeah. “In the real economy, exporters will benefit from the weak ringgit, while importers will face higher import costs and margin squeeze.

Source: The Edge Markets October 10, 2022 18:03 UTC