Former prime minister Dr Mahathir Mohamad broached the topic of pegging the ringgit yet again as the ringgit weakened against the US dollar and Singapore dollar.
In a statement today, Mahathir said the ringgit was currently experiencing volatility due to the Covid-19 pandemic while trade was increasing.
"For businesses that import or borrow using US dollars, the depreciating value of the ringgit will increase the cost of production and retail prices.
"However, we shouldn't talk about fixed exchange rates. This is taboo. Haram. Yes. In 1997 and 1998, the fixed exchange rate saved us.
"But that was because politicians didn't understand the financial system. Do not emulate them," Mahathir wrote.
Mahathir, however, did not suggest that the ringgit needs to be pegged now or in the future.
Bank Negara pegged the ringgit at RM3.80 to the US dollar in September 1998 following the Asian Financial Crisis.
At the time, Mahathir was both prime minister and finance minister, and he blamed currency speculators for attacking the ringgit.
Mahathir was widely criticised abroad for imposing capital controls, which were only lifted in July 2005.
The ringgit traded at RM2.90 to the US dollar in 2011 but has been steadily devaluing since. In 2017, the ringgit traded at around RM4.50 to the US dollar - a record high.
Today, the ringgit is trading at RM4.38 to the US dollar, continuing on a slide since early 2011. - Mkini
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