Dr M: Weak ringgit due to government’s ‘wrongdoings’

Worldwide financial crisis looms due to many ‘abuses on the financial system.’

KUALA LUMPUR: Former Prime Minister Dr Mahathir Mohamed yesterday attributed the recent decline in the value of the Ringgit to ‘wrongdoings’ on the part of the present government.

Speaking to reporters at Universiti Kebangsaan Malaysia yesterday, Mahathir was also unsure whether the country’s economic fundamentals were as strong as they are made out to be.

“We are told that the economic fundamentals are strong but of course we don’t know whether it really is strong,” he said. “Anyway what we do see is the Ringgit declining in value and there is some political influence on that.”

The Ringgit closed yesterday at RM3.7345 to the US Dollar and RM2.7799 to the Singapore Dollar.

Dr Mahathir also made an oblique reference to Prime Minister Najib Razak’s recent claim that Mahathir was the cause of the “crisis”.

“I am told that I am the cause of the crisis, but even if I don’t (cause the crisis) the economy is going to go down because of wrongdoings on the part of the government,” he said.

He said that the present crisis was different from the one which the country experienced in 1997.

“At that time the currency traders were devaluing our money,” he said. “(They) were doing this not for political reasons but for them to make money.”

Mahathir has since the turn of the year been on the warpath against Najib, particularly with regard to the debt incurred by 1Malaysia Development Berhad (1MDB), said to be in the region of RM42 billion, which have hitherto been largely unexplained.

In his latest blog posting, Mahathir had said that the ‘crisis’ was caused by “the Prime Minister creating 1MDB, borrowing huge sums of money and losing billions of ringgit.”

Dr Mahathir said that employing financial controls such as pegging the Ringgit, which was done during the financial crisis in 1997/1998, would be one measure that could be taken to address the problem caused by the weakening Ringgit.

“Pegging the Ringgit is of course one way of stabilising it,” he said. “It gives confidence to people.”

“But they don’t seem to think it is a good idea,” he added.

He said that the world was heading for a financial crisis. “Europe is not doing well, many countries are not doing well, because there are a lot of abuses on the financial system,” he said.