Ringgit situation will improve, Malaysia exploring non-dollar-based options

PRIME Minister (PM) Datuk Seri Anwar Ibrahim (picture) said the situation regarding the value of the Malaysian ringgit would improve by the end of the year after meeting with Bank Negara Malaysia (BNM) governor Datuk Abdul Rasheed Ghaffour.

He told the Parliament that the central bank had shown data that the situation is getting “more convincing” as measures taken by the government start to work.

“With clear policies in the economy and investments, including in the areas of energy transition that we have attracted, this will lead to the strengthening of the currency,” he told the Dewan Rakyat during the PM’s Question Time today.

He was replying to a question from Datuk Awang Hashim (Perikatan Nasional-Pendang) on the ringgit’s depreciation against the US dollar and its implications, including on the middle 40% income group (M40), who rely on subsidies such as for fuel to ease their burden in the cost of living.

Anwar added that the depreciation of ringgit was due to the continuous increase of the US Federal Reserve’s interest rates and is not related to the current position of Malaysia’s own economy.

He said that the country’s investments are performing well, and both inflation and unemployment have decreased.

“It shows that it (weakening of the ringgit) is not due to our economic policies and positions,” he said during the PM’s Question Time today.

To address the depreciation of the ringgit, Anwar said the government through BNM is exploring initiatives to encourage countries to trade in local currencies.

So far Malaysia has carried out trade using the ringgit with China, Thailand and Indonesia, he said.

“We succeeded in using local currencies with Indonesia, Thailand and China. However, not all (countries) are involved in commodity and international trade. That is why I suggest de-dollarisation,” he told the Dewan Rakyat today.

He added some government-linked investment companies (GLICs) and local private corporations have also begun to trade in local currencies.

“If (US) dollar is used exclusively, surely the ringgit is at stake. But there are many companies that attempt to use (US) dollars and have savings in ringgit so the transactions can be in ringgit,” he said.

Previously, Anwar had proposed for Asian countries to establish the region’s own version of the International Monetary Fund (IMF) called an Asian Monetary Fund (AMF) which would provide Asian countries with a better alternative during crises. — TMR