Kota Kinabalu (Jan 20) - The Malaysian ringgit’s steady strengthening against the US dollar and Japanese yen over the past 60 days is beginning to show tangible effects on Sabahans, delivering relief to consumers while posing challenges for certain export-oriented sectors.
Over the last two months, the ringgit has traded at firmer levels against the US dollar and the yen, marking one of its more stable and stronger periods in recent times. This appreciation has translated into increased purchasing power for Malaysians, including those in Sabah, particularly when it comes to imported goods and overseas spending.
For ordinary consumers, the stronger ringgit has helped ease the cost of imported items such as electronics, vehicles, machinery and certain food products that are priced in US dollars or yen. Retailers and distributors in Sabah, who rely heavily on imported goods due to the state’s geographical location, have benefited from lower import costs, potentially reducing pressure on retail prices. This has also helped moderate inflation, offering some relief amid ongoing cost-of-living concerns.
Sabahans planning overseas travel or education in countries using the US dollar or Japanese yen are also seeing benefits, as their ringgit now stretches further when converted into foreign currency. Online purchases from international platforms priced in these currencies have likewise become more affordable.
However, the stronger ringgit presents a more challenging environment for exporters and sectors earning revenue in foreign currencies. Sabah’s export-related activities — including agriculture, seafood processing and other commodity-based industries — may experience narrower profit margins, as earnings in US dollars or yen convert into fewer ringgit. This can affect business cash flow and competitiveness, particularly for smaller exporters with limited capacity to hedge against currency movements.
There are also implications for state revenue linked to foreign-currency earnings, such as those associated with oil and gas. A stronger ringgit reduces the ringgit value of US dollar-denominated income, which could influence overall fiscal planning if the trend persists.
On the tourism front, the impact is more nuanced. While a stronger ringgit slightly raises costs for foreign tourists, Malaysia — and Sabah in particular — remains competitively priced compared to many regional destinations. Industry players note that exchange rates are only one of many factors influencing travel decisions, alongside connectivity, attractions and overall value.
Overall, the ringgit’s performance over the past 60 days has brought clear short-term benefits to consumers and import-dependent businesses in Sabah, while creating headwinds for exporters and foreign-currency earners. Economists note that the net effect will depend on how long the currency strength is sustained and whether businesses can adjust their pricing and strategies accordingly.