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Thursday, August 13, 2015

Lower ringgit not 100% bad, says Salleh

Minister says while foreign debts and imports will suffer, country’s tourism and exports will enjoy a boost.
salleh-keruak
PETALING JAYA: A weakening ringgit is not necessarily completely bad for the country and Malaysians should look at the situation from all points before jumping to conclusions, said Salleh Said Keruak.
The new Communications and Multimedia minister made this comment based on the weakening of the ringgit.
Explaining the situation in his latest blog entry, Salleh said, “Whether it is good or bad that a country’s currency is lower depends on how that country benefits from it.
“From the point of tourism and exports it is, of course, good (for Malaysia). From the point of foreign debts and imports it would be the reverse.”
He made comparisons to China and Germany, both of which were taking advantage of the weakening yuan and Euro respectively.
In the case of China, he explained, the government had devalued the Yuan for the second day running, causing worry in other countries because the “positives” as a result of the move was far outweighing the “negatives”.
Germany on the other hand was facing criticism for choosing the weak Euro over the stronger Mark, causing other countries to criticise it for having an “unfair advantage”.
“Although that may be unfair it is not immoral or illegal as this is how the system works and all Germany is doing is it is taking advantage of a system that already exists.”
In regard to the weakening ringgit, Salleh advised Malaysians to assess all its implications first before condemning the situation outright.
“So before we jump to conclusions and say that a lower Ringgit is 100% bad we need to analyse the overall situation and add the plusses to the minuses and decide what the overall and long-term outlook is going to be to the country.”

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