KL won't peg ringgit to greenback, says minister

Malaysia has no plans to peg the ringgit to the US dollar, as was done during the 1997 Asian financial crisis.
Malaysia has no plans to peg the ringgit to the US dollar, as was done during the 1997 Asian financial crisis. PHOTO: AFP

KUALA SELANGOR • Malaysia has no plans to peg the ringgit to the US dollar, as was done during the 1997 Asian financial crisis, despite the sharp depreciation of the currency, Second Finance Minister Ahmad Husni Hanadzlah said yesterday.

Many currencies have been affected by the sustained rise of the greenback, said Mr Ahmad Husni, who also expressed confidence that the ringgit will stabilise.

"It is not only the ringgit that is affected. Currencies of Singapore and Indonesia, for example, are being pitted against the US dollar, which has been appreciating against many other currencies," he said after opening the Tanjong Karang Umno division meeting yesterday.

Malaysia has strong economic fundamentals that can be seen from its positive economic growth, low unemployment and inflation rates, positive foreign reserves, private consumption and foreign direct investments, he said.

"Don't ever have the impression that the ringgit has weakened... it is the US dollar that has appreciated," said Mr Ahmad Husni, who was responding to calls for pegging the ringgit after a sharp plunge in its value to the lowest in 17 years.

The ringgit is at its weakest level since 1998 after tumbling 11 per cent against the US dollar, the worst among Asian currencies.

The slump came as foreign funds pulled out a net RM11.7 billion (S$4.13 billion) from the nation's shares this year as the benchmark FTSE Bursa Malaysia KLCI retreated 4.5 per cent.

Mr Ahmad Husni also expressed satisfaction with the progress of 1Malaysia Development Berhad's (1MDB) rationalisation plan, reported the Malay Mail Online.

"Let's focus on the rationalisation plan, and look at the interests of the nation. We want 1MDB (to be) very healthy," he said.

THE STAR/ASIA NEWS NETWORK

A version of this article appeared in the print edition of The Sunday Times on August 09, 2015, with the headline 'KL won't peg ringgit to greenback, says minister'. Print Edition | Subscribe