Prime Minister Datuk Seri Najib Razak today blamed the country's political atmosphere as among the reasons that led to the spiralling of the ringgit against the US dollar.
Writing on his blog, Najib, who is also finance minister, said Malaysia was recently shocked by the fall of the ringgit and listed out several factors as the cause for the decline.
"The existence of political play and intense speculation has resulted in an uncertain sentiment towards the administration," he wrote, adding that China’s move to devalue the yuan also caused the ringgit as well as other Southeast Asian currencies to fall.
Najib's announcement came as the ringgit becomes Asia’s worst-performing currency this year. It dropped 12.5% against the dollar and weakened beyond RM4 to a dollar for the first time since 1998 yesterday, spurred by the yuan devaluation.
Another reason for the ringgit's decline, Najib said today, is the expectation that the United States will raise its interest rates, which will make investors around the world move their funds to the dollar.
He added that the drastic decline in the prices of commodities such as (crude) oil, palm oil and rubber also contributed to the plunge, more so because Malaysia was the producer of these commodities.
Najib, however, remained positive and said despite the challenges, the growth rate of the economy was still stable.
"In its latest report, Bank Negara Malaysia showed that economic growth remained on a stable foundation with a growth rate of 4.9% in the second quarter of 2015," he said.
Najib promised that Putrajaya would do its best to address the problem.
"I guarantee that the government will do its best to resolve this situation with the purpose of stabilising the country's economy," he said.
Earlier today, Bank Negara Malaysia governor Tan Sri Zeti Akhtar Aziz said the impact of the ringgit’s depreciation was still manageable and that Malaysia's economy would remain on a steady growth path.
Earlier today, Bank Negara Malaysia governor Tan Sri Zeti Akhtar Aziz said the impact of the ringgit’s depreciation was still manageable and that Malaysia's economy would remain on a steady growth path.
"Monetary policy remains accommodative and supportive of economic activity," she reportedly said.
- TMI
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