Strengthening ringgit boosts MSMEs in Malaysia, offering potential savings on imported goods and reducing business costs, traders optimistic
KUALA LUMPUR: The strengthening of the ringgit against the US dollar has brought relief to micro, small and medium enterprises (MSMEs) who see the development as having the potential to reduce business costs and avoid increases in selling prices.
Earlier this week, the ringgit strengthened and surpassed the psychological level of 4.00 against the US dollar, continuing the rise that began a week earlier, thus showing a recovery in sentiment towards the country’s economic fundamentals and political stability.
A Bernama survey in several states found that the majority of small traders welcomed the development, even though they are still waiting for the actual impact on the cost of imported materials.
In JOHOR, kopi tenggek (drip coffee) entrepreneur in Tanjung Piai, Ghazaley Ayiub, 59, described the strengthening of the ringgit as having a positive impact on his business which uses kitchen equipment imported from China.
He said that although he uses a lot of Liberica coffee beans from Johor, the stronger ringgit has indirectly helped reduce the cost of purchasing goods from abroad.
“We are still sourcing kitchen equipment from China for the second branch in Larkin. So there are savings and this helps us maintain our selling prices,” he said, optimistic that the development is also expected to attract more customers from Singapore.
Meanwhile, Rodakafe manager Irwan Latiff said the positive effects of the strengthening ringgit will only be felt if the situation continues for a longer period and the benefits are channelled by manufacturers and suppliers to small entrepreneurs.
“We hope that the government and relevant agencies can monitor the supply chain more effectively to ensure that the reduction in import costs really reaches small and medium entrepreneurs,” said Irwan who also believes that utility costs should be reduced so that MSME businesses can operate more efficiently.
In TERENGGANU, Kafe CantekSekali operator Rina Rahman, 48, said that 50 per cent of the raw materials at her business premises are imported goods and the value of the ringgit will certainly have a huge impact on the operating costs and profits of the business she has been running since 2017.
“It is hoped that the prices of goods will remain stable and not increase sharply. This will give us some breathing room after going through the pressure due to the increase in the price of goods for many years,” she said when met at Kafe CantekSekali in Jalan Dato Isaac, Kuala Terengganu.
Rina said she also manages stocks strategically including storing durable goods such as flour as well as buying other goods in bulk to save on costs including bills and rent.
A canteen operator in PAHANG, Marina Abbas, 49, also expects a positive impact on the prices of raw materials such as imported rice and meat.
“Although there has been no major change in the price of supplies at the moment, I believe it will decrease. Imported materials such as rice and meat that can be purchased at cheaper prices will certainly please traders like us,” she said.
Hidayat Abdul Halim, 48, also sees the strengthening ringgit as an opportunity to upgrade his business equipment.
“Previously, I had to postpone my plan to buy a new machine because I did not have enough capital, so with the appreciation of the Ringgit, I am confident that the price will become cheaper and more affordable,” he said, hoping that the price of imported coffee will decrease.
In PERLIS, most small traders, including Husaimi Hashim, 64, and Abdul Salam Saad, 57, admitted that they had not yet felt the direct impact of the strengthening currency.
Husaimi, 64, a food trader in Kangar, said he was grateful for the positive development of the local currency and hoped that it could help reduce the cost of imported goods such as meat, onions and vegetables.
“We are indeed grateful that the ringgit has strengthened, but so far the prices of goods have remained the same. If our currency remains strong, I hope we can ease the burden of small traders like us through the cost of materials becoming cheaper,” he said.
Meanwhile, Abdul Salam Saad, 57, who has been in business for the past five years in Kuala Perlis, also shared the same view that the price changes at the supplier level have not yet been noticeable.
“At the moment, the strengthening of the ringgit has not had a big impact yet,” he said, adding that he spends more than RM300 a day on purchasing raw materials.
