KUALA LUMPUR: The government chose not to peg the Malaysian Ringgit (RM) to avoid investors and the world market losing confidence in the country’s economic strength and growth.
Prime Minister Datuk Seri Najib Tun Razak said, pegging the Ringgit (RM) is an artificial way to stabilize the currency’s strength and it takes a long time to gain back the investors’ confidence in Malaysia.
“What we need is to have a strong economic fundamental that will gradually reflect the real value of the money.
“What happens to the current Ringgit value is it falls back to the policy of developed nations especially the United States. When the interest rates increase, the money or capital will flow from emerging economies to developed nations, and the other factor is due to the drop in oil prices.
“These two factors are out of our control,” Najib said in an interview on RTM’s “Bicara Empat Mata” aired last night and hosted by Datuk Aznil Nawawi.
Najib added, the steps taken by Malaysia to peg the RM during Asia’s economic crisis in 1997 cannot be repeated as it is very costly.
“Now we start to see the effects on RM and many people expects it to be stronger in due time,” he said.
On the media social’s comment about the RM “weakening situation”, Najib said, it is mostly based on personal opinions and does not mean it is correct and also whether it is sincere or with political motives.
Regarding the oil price that is on a managed float system, Najib said, the people have to get used to it as in developed countries the price of oil increase is on a daily basis.
He said the government assures that it will take certain action to help the people in case the price of RON95 exceeds RM2.50 per litre.
“We have announced that we can’t afford to provide bulk subsidies and that is why we have a more focused subsidy system,” he added.
Meanwhile, on the National Transformation 2050 (TN50), the Prime Minister said, it will take a different approach as it would feature a bottom-up approach that reflects the people’s aspirations while Vision 2020 had adopted a top-down approach.
“We have to start now because we need time to gather suggestions and people’s views and opinions,” he said. _Malaysia World News