And because even Japan is in the doldrums, everyone is targeting the West, which can only absorb so many clothes, shoes, toys and timber. Receipts are so far disappointing. Travel agents have written off regional visitors, and Westerners are being put off by reports of spreading smog from burning forests in Indonesia. Interest rates are high. That's bad for business.
Companies have to pay more interest on their debts.
Consumers hesitate to make any big-ticket purchases, further squeezing property developers, car makers, appliance dealers and almost everyone else. They also have to deter currency speculators by making it expensive for them to borrow the local currency to mount a renewed attack. Inflation is another factor. Because imports have become more expensive, too much buying abroad could wreak havoc on the consumer price index. True, Malaysia has not raised interest rates too much and it is still seeing a strengthening currency and moderate inflation.