A weaker ringgit will be the immediate impact to Malaysia from Brexit, which fell steadily against the US dollar at a pace last seen in the Asian financial crisis of 1997/1998 by midday yesterday as investors dumped riskier assets in emerging markets for so-called safe-haven assets such as US treasuries, Japanese government bonds, German bunds and gold.

Malaysian Rating Corp Bhd chief economist Nor Zahidi Alias says the whole issue boils down to uncertainties that will have impact on business decisions and the real economy especially in Europe. Brexit will cause a knee jerk reaction to the financial markets - currencies being the most vulnerable. The volatility in equities and bonds cannot be underestimated in the short term but will eventually subside when a clearer picture emerges.

For now, the pound sterling has weakened against the ringgit but the cross-rate will be up for a lot of volatile trading. Analysts have pointed out before the referendum that the ringgit and the rupiah were the most vulnerable Asean currencies to swings associated to the uncertainties surrounding the aftermath of Brexit.

The direction of commodity prices and crude oil in particular, will be key to the ringgit’s performance. The global crude oil benchmark, Brent, declined by more than 4 per cent in the late morning as British media confirmed that Brexit was imminent. There is every indication that crude oil prices will continue to be volatile because demand may be crimped by Brexit uncertainties stemming from recessions in Britain and the EU, potentially slower US economic growth and the unresolved Chinese debt crisis.