How The Weak Ringgit Presents Opportunities for Investors

The Malaysian ringgit is now the lowest it has ever been since the Asian Financial Crisis in 1997. Even as authorities across the Causeway aim to stem the sustained depreciation in the ringgit, the weak currency also presents opportunities for growth.

The ringgit has dropped to 4.76 per United States dollar and around 3.45 per Singapore dollar. This makes it the weakest currency in 2023 after the Japanese yen.

The fall is a result of a variety of factors, both domestic and foreign. These include the economic slowdown in China, Malaysia’s top trading partner;local political uncertainty; and the various geopolitical issues around the world.

But as the ringgit faces a record low, investors – especially those in Singapore and China – are looking to capitalise on the property market. Kashif Ansari, Co-founder and Group Chief Executive Officer of Malaysia-based real estate firm Juwai IQI, credits the weakening ringgit for luring foreign investors back into the market.

Proximity to Singapore a Draw

Malaysia’s strategic location also makes it an attractive prospect for investors as they look to expand their international property portfolio. Rising property costs in Singapore, for instance, are pushing investors to look elsewhere, and the sliding ringgit has enhanced the appeal of Malaysia, its next-door neighbour.

Datuk Stewart LaBrooy, Executive Chairman of property developer AREA Management Sdn Bhd, told the New Straits Times the ringgit depreciation translates into a discount for foreign investors, who will enjoy a significant upside when the currency appreciates in the future.

Multinational corporations, he added, are showing growing interest in industrial properties in Malaysia, aided by government incentives aimed at drawing high-tech and high-value firms.

At the same time, businesses that choose to operate out of Malaysia also benefit from its proximity to Singapore, a leading financial hub in Asia.  

“What is most interesting to note is that despite all these businesses choosing to relocate to Malaysia, they still have their companies registered in Singapore," said Datuk LaBrooy of the win-win strategy.

Travel between the two countries will soon be enhanced with the Johor Bahru-Singapore Rapid Transit System (RTS) Link. Expected to begin operations in 2026, the 4km-long cross-border rail shuttle service will serve up to 10,000 commuters per hour in each direction.

The two Asean neighbours also share many cultural similarities, which means fewer teething issues for those who wish to settle in Malaysia.

Close Diplomatic Ties with China

For Chinese investors, the largest advantage lies in Malaysia’s close relationship with China. The two countries reaffirmed their strong ties when Chinese Foreign Minister Wang Yi visited Malaysian Prime Minister Anwar Ibrahim in Penang in August.

There, they discussed various aspects of cooperation and collaboration, focusing on investments, education and regional issues.

The two politicians also met in China twice this year – in March and September – and the warm diplomatic relations will only benefit bilateral investments and trade.

These developments create a promising environment for investments and trade, said Mr Winston Lee, Director of Special Projects at PropertyGuru.

“The shared cultural similarities and close diplomatic ties between Malaysia and China set the stage for Chinese investors to benefit significantly,” he said.

While the geopolitical landscape remains complex, he noted that opportunities abound in the real estate sector. “The Malaysian ringgit may currently be at its lowest point in decades, but we can anticipate its resurgence in the near future. To harness the fullest long-term benefits of investing in Malaysian property assets, the time to act is now."