Govt policies to halt ringgit decline doomed to fail - Guan Eng

The government’s attempts to arrest the decline in the ringgit’s value are futile if it continues to implement poor policies on the rising cost of living, inflation, and labour shortages, according to Bagan MP Lim Guan Eng.

In a statement today, the former finance minister pointed out that the ringgit has not only declined in comparison to the US dollar but also the Singapore dollar and Indonesian rupiah.

“For the government to dismiss the decline in the value of our ringgit as cyclical due to rising interest rates in the United States, the war in Ukraine, or the Covid-19 lockdowns in China is like an ostrich in the sand choosing to cover up their inadequacies in good governance.

“The government’s current pro-active monetary policy to arrest the decline in the value of the ringgit against other currencies is doomed to fail with poor policy-making and frequent policy U-turns in dealing with the rising cost of living and inflationary pressures, severe labour shortage, and acute trust deficit in ministerial competence.

“Unless these issues are addressed, the ringgit will continue to decline regardless of how proactive our monetary policy is,” he said.

He noted that the ringgit is down against the Singapore dollar by 4.2 percent and the Indonesian rupiah by 3.1 percent for the year to-date.

Lim warned that the ringgit is expected to decline further from RM4.48 to RM4.50 against the US dollar in the near future, which may worsen domestic inflationary pressures.

This could lead to increasing the amount of foreign debt that Malaysia has to pay, and the cost of imported food, energy, goods and services, thereby further raising the cost of living for the rakyat, he said. - Mkini