If you are a Malaysian with ongoing foreign currency needs – whether it’s funding your child’s education abroad, investing in a foreign property or paying for overseas business transactions – the Ringgit volatility over the past two years may have been a roller coaster ride.

While the Ringgit has largely stabilised this year¹, strengthening to as high as RM3.98 to USD1 in March², the results of Britain exiting from the European Union (Brexit) on 24 June 2016 triggered another round of volatility in the Ringgit, with a fresh impetus for capital outflows in the near term, and global financial markets dealing with far-reaching effects caused by the Brexit¹.

Following the results of the Brexit vote, the Ringgit closed at RM4.09 against the US Dollar on Friday (24 June)¹ and extended its decline on Monday morning (27 June) to as low as RM4.17 per US Dollar³. According to Paul Mackel, HSBC Head of Global Emerging Markets, Foreign Exchange Research, the overall implications of the Britain’s vote to leave are negative for emerging markets’ foreign exchange.¹

“The likely stress in global markets will see most emerging markets currencies come under significant pressure for the time being. Currencies with large foreign portfolio exposures and wide external imbalances will face large downside pressure. These currencies (which include the Ringgit) are the most ‘risk-off’ currencies,” he was quoted as saying.¹

Independent forex strategist, Suresh Ramanathan says the weakening of the Ringgit is in line with other emerging market currencies as investors liquidate their position in emerging market assets.⁴ According to him, emerging markets could face an outflow of capital as investors rush to put their money in “safe haven” assets like US treasuries, gold and Yen.⁴

“The volatility of the Ringgit against the US Dollar would continue in the next few months and the Ringgit could depreciate further if the effect from the Brexit decision worsens,” says Ramanathan.⁴

However on a brighter side, the Ringgit is strengthening against the Sterling, which is positive news for those with children studying in the UK or are paying for investment properties there.⁴ The Ringgit rose as much as eight percent against the Sterling on 24 June and ended the day at RM5.69 per Sterling.⁴

 

Take Control of Your FX Needs

Conventional foreign currency or FX transaction via banks come with certain restrictions. Firstly, FX transactions are priced at the board rate which means that you are probably paying a higher rate as compared to the potential market rate. Secondly, due to how FX is traded, you could only have access to FX services from the banks during working hours from Monday to Friday.

 

Now, with the introduction of HSBC’s real-time FX rate, you are able to gain better control over your foreign currency needs and transactions. It offers you the convenience and flexibility to perform FX transactions anytime, anywhere.

 

Whether you need to convert or transfer FX between your own accounts or remit funds overseas, the competitive real-time FX pricing available through HSBC’s real-time FX rate could potentially offer you a favourable rate each time you perform FX transactions. This can be helpful when the currency markets are volatile and the Ringgit is fluctuating.HSBC’s real-time FX rate provides extended hours for Ringgit FX conversions from 9am to 12am during working days, as well as extended hours for FX to FX conversions seven days a week round-the-clock. This allows you to transact Ringgit FX conversions after working hours and even on weekends for FX to FX conversions at your convenience.Other useful features of HSBC’s real-time FX rate include the ability to set standing orders for repeat or pre-dated transactions so you never miss a transfer, and also gain access to a wider range of foreign currencies available for accumulation and remittance.

 

You can also take control of your FX needs through HSBC Premier which gives you access to our banking services and support anywhere in the world. For example, if your child is going off to university in Australia or another foreign country for further studies, you can open an HSBC Premier account from Malaysia (subject to host country approval). You can also view, manage and make instantaneous, fee-free international fund transfers between your HSBC Premier accounts through HSBC Global View and Global Transfer for your child’s university fees and expenses.

 

To find out more about HSBC’s real-time FX rates and HSBC Premier’s international banking solutions, please contact your Relationship Manager or visit any of our branches.