Weakening ringgit getting to the SMEs

KUALA LUMPUR: Small and medium enterprises (SMEs) are feeling the pinch from the depreciation of the ringgit, claiming there is a significant drop in the buying and spending pattern.

SME Association of Malaysia president Teh Kee Sin said the weak ringgit, coupled with the drop in global oil prices, floods and the latest air tragedy, had led to a reduction of about 20% in consumption pattern.

“Many of our 5,000 members reported that the buying and spending sentiment was slow moving into the year.

“This will probably continue for the next few months. The drop in the ringgit will also hit us hard as the US dollar is still the preferred currency when it comes to trade,” he said when contacted.

Many SMEs, he said, would be forced to fork out additional sums in the trading process to compensate for the weakening ringgit.

If the ringgit continues to do poorly, he said there could be a significant impact on bonuses and increments usually provided by SMEs before Chinese New Year.

“Everyone has their eyes on the market trend and we are hoping for the best,” he said, adding that one good aspect that SMEs could look forward to is the allocation of RM14.3bil under the 2015 Budget for SME development.