The Malaysian ringgit had a terrible year, dropping 17% against the greenback since April of 2016. The ringgit did show some strength in the first four months of 2016, hitting a high of 3.843 on April 11, however, Trump’s election caused the Malaysian currency to drop precipitously during the the last two months of 2016.
While Malaysia’s currency has been in a downtrend since 2013, on January 4, 2017, the ringgit hit an 18-year low of 4.4995 against the greenback - a price not seen since 1998.
And the ringgit is expected to weaken even further in 2017, according to a BMI Research report, which states:
“Given that China is Malaysia’s largest export partner, we believe that Malaysia’s export-driven economy remains exposed and is likely to be negatively impacted.”Additionally, BMI’s report states that interest rates hikes in 2017 by the FED may set the stage for further ringgit losses.
The ringgit’s horrible performance has not gone unnoticed by tech-savvy Malaysian investors, who are increasingly looking to alternative investments to preserve purchasing power.
Bitcoin, the digital currency that is not backed by any government or central authority, was heavily traded on LocalBitcoins - a P2P marketplace for digital currency traders - in Malaysia in the last two months of 2016.
In fact, the first big spike in volume on LocalBitcoins in Malaysia occurred in the week following Trump’s election, when RM1,595,772 worth of Bitcoin changed hands in the country.
And in the weeks following the U.S. election - as the ringgit began to drop very rapidly against the dollar - volume on LocalBitcoins continued to surge, hitting an all-time high of RM2,650,067 ($592,524) for the last week of December.