A Malaysian economist believes that the Pound Sterling could eventually depreciate against the ringgit to as low as RM4 per pound, Bernama reports.
MIDF Research economist, Izzuddin Yussof reportedly said that Britain’s vote to leave the European Union (EU) today would mean the impact was expected to go ‘beyond the financial markets and could also affect the global economy”.
“The shock in the financial market will be huge, which could potentially slow down the whole global economy. To pinpoint a specific forecast will prove to be difficult as there are still a lot of uncertainties, though we are expecting the lowest (that the) Pound Sterling could depreciate against ringgit would be at RM4.00 per pound,” Izzuddin told Bernama’s Mohd Khairi Idham Amran.
The ringgit reached 5.6249/6503 against the pound sterling at 2pm today, from yesterday’s close of 5.9342/9465, the news agency reported.
Bloomberg meanwhile, reports that the ringgit today headed for ‘its worst slump since the Asian Financial Crisis’ following Brexit.
The ringgit reportedly fell 2.5 per cent to 4.1207 per dollar as of 12:36pm in Kuala Lumpur, set for the biggest loss since June 1998, as shown by prices from local banks compiled by Bloomberg.
It had earlier risen to a seven-week high at 3.9893, the report said.
The pound collapsed to a 31-year low and there was pandemonium on currency, equity and oil markets Friday as Britain voted to leave the EU, fuelling a wave of global uncertainty.
Sterling crashed 10 percent to $1.3229 at one point, its weakest level since 1985, while the greenback itself slumped below 100 yen for the first time in two-and-a-half years as traders fled to safety.
European stock markets went into free fall at the opening, mirroring a rout in Asian markets, which were still open as the referendum results trickled in.
The London FTSE-100 index was down by around 5 percent in morning deals, having come off early lows after British Prime Minister David Cameron announced his resignation.
Banking stocks led the way down, with Royal Bank of Scotland, Barclays and Lloyds all losing close to a quarter of their market value at the opening.— Additional text by AFP
