Bad time to have Najib as PM, says Santiago

The Klang MP says loss of confidence in Najib contributes in a major way to the ringgit's troubles.

PETALING JAYA: Although the loss of confidence in Prime Minister Najib Razak is not the only reason for the ringgit’s free fall, it does significantly contribute to it, according to Klang MP Charles Santiago.

Santiago, an economist, acknowledged that conditions in China as well as a drop in Malaysia’s revenues from petroleum and palm oil were major causes of the reduction in the ringgit’s value, but he said these should not lull anyone into ignoring the huge impact of the public’s loss of confidence in Najib’s leadership and his ability to save the situation.

What’s worse, he added, there was a belief shared by many members of the public that Najib was breaking laws in order to deal with this loss of confidence, as well as an impression that “a cover-up is being organised” to help him escape charges of alleged corruption.

He also acknowledged that there was no direct relation between the fall of the ringgit and the alleged troubles in 1MDB, for which Najib has been largedly blamed.

“But what is certain is that the loss of confidence in Najib Razak has made the free fall worse,” he said.

A news report last Monday quoted Bank Negara Governor Zeti Akhtar Aziz as saying the ringgit would start recovering once issues surrounding 1MDB were resolved.

In a reaction, 1MDB released a statement saying it was disappointed with Zeti for apparently singling it out for blame. It said the weakness of the ringgit and other currencies was due to the abrupt fall in oil prices, an expectation of rising US interest rates and slowdowns in emerging markets.