The Malaysian Ringgit experienced a significant depreciation against the US Dollar and the Singapore Dollar over the past few months. a. Provide your analysis on the depreciation of the Ringgit based on the data balance of payments Q4 2021 and Q1 2022. 1. You can refer to Malaysia's balance of payments data from www.bnm.gov.my in the "Rates and Statistics" column under the heading "Monthly Highlights and Statistics" in particular table 3.6 2. The answer should use your knowledge of the inflow and outflow of money, and the demand and supply of foreign currency in the determination of exchange rates.

3.6 2021 4Q 2022 1Q Imbangan Pembayaran (BPM6) Balance of Payments (BPM6) Jumlah Total Jumlah Total Bersih Barangan dan Perkhidmatan / Goods and Services Net Barangan/Goods 15,332 36,335 51,761 2,983 25,568 40,549 1 Merujuk kepada Manual Imbangan Pembayaran Edisi Keenam (BPM6). Angka-angka tidak semestinya terjumlah disebabkan oleh penggenapan. Source: Bank Negara Malaysia and Department of Statistics Malaysia 1 Kredit Credit Debit Debit Akaun Semasa / Current Account 271,287 268,933 228,384 Perkhidmatan / Services Bersih Net Kredit Credit 219,526 -15,426 23,538 -14,982 24,049 Debit Debit 38,964 39,030 Pendapatan Primer/Primary Bersih Income Kredit Debit Net Credit Debit Pendapatan Sekunder/ Secondary Income Capital Account Bersih Kredit Debit Bersih Kredit Debit Net Credit Debit Net Credit Debit -19,639 37,277 56,916 -1,363 6,400 -20,135 15,344 35,479 -2,450 5,315 7,764 -298 7,764 -86 39 337 29 116 Jumlah Total 663 30,448 Pelaburan Langsung / Direct Investment Bersih Net Aset Assets Akaun Kewangan/Financial Account 10,530 -17,172 20,762 9,070 Liabiliti Liabilities Pelaburan Portfolio / Portfolio Investment Bersih Net Aset Liabiliti Assets Liabilities 27,702 2,562 -6,119 11,692 -10,084 -13,856 8,680 3,771 Derivatif Kewangan/ Financial derivatives Bersih Net -1,806 173 Pelaburan Kesilapan dan Lain / Ketinggalan Bersih Other Investment Bersih Net -10,623 19,598 RM juta /RM million Net Errors and Omissions -13,133 -20,593 Imbangan Keseluruhan Overall Balance 2,564 12,751 1 Based on Balance of Payments Manual, Sixth Edition (BPM6). Numbers may not necessarily add up due to rounding. Source : Bank Negara Malaysia and Department of Statistics Malaysia 3.6 2021 4Q 2022 1Q Imbangan Pembayaran (BPM6) Balance of Payments (BPM6) Jumlah Total Jumlah Total Bersih Barangan dan Perkhidmatan / Goods and Services Net Barangan/Goods 15,332 36,335 51,761 2,983 25,568 40,549 1 Merujuk kepada Manual Imbangan Pembayaran Edisi Keenam (BPM6). Angka-angka tidak semestinya terjumlah disebabkan oleh penggenapan. Source: Bank Negara Malaysia and Department of Statistics Malaysia 1 Kredit Credit Debit Debit Akaun Semasa / Current Account 271,287 268,933 228,384 Perkhidmatan / Services Bersih Net Kredit Credit 219,526 -15,426 23,538 -14,982 24,049 Debit Debit 38,964 39,030 Pendapatan Primer/Primary Bersih Income Kredit Debit Net Credit Debit Pendapatan Sekunder/ Secondary Income Capital Account Bersih Kredit Debit Bersih Kredit Debit Net Credit Debit Net Credit Debit -19,639 37,277 56,916 -1,363 6,400 -20,135 15,344 35,479 -2,450 5,315 7,764 -298 7,764 -86 39 337 29 116 Jumlah Total 663 30,448 Pelaburan Langsung / Direct Investment Bersih Net Aset Assets Akaun Kewangan/Financial Account 10,530 -17,172 20,762 9,070 Liabiliti Liabilities Pelaburan Portfolio / Portfolio Investment Bersih Net Aset Liabiliti Assets Liabilities 27,702 2,562 -6,119 11,692 -10,084 -13,856 8,680 3,771 Derivatif Kewangan/ Financial derivatives Bersih Net -1,806 173 Pelaburan Kesilapan dan Lain / Ketinggalan Bersih Other Investment Bersih Net -10,623 19,598 RM juta /RM million Net Errors and Omissions -13,133 -20,593 Imbangan Keseluruhan Overall Balance 2,564 12,751 1 Based on Balance of Payments Manual, Sixth Edition (BPM6). Numbers may not necessarily add up due to rounding. Source : Bank Negara Malaysia and Department of Statistics Malaysia