Rising inflation proves task force ineffective, Lim tells Annuar

 

Lim Guan Eng says Annuar Musa is confused over ’cause and effect’ when it comes to the link between inflation and Bank Negara Malaysia’s interest rate hike.

PETALING JAYA: The continued rise in prices proves that the anti-inflation task force chaired by communications and multimedia minister Annuar Musa has not been effective in resolving inflation, says DAP chairman Lim Guan Eng.

The former finance minister asked whether Annuar can explain why the Consumer Price Index (CPI) rose from 3.4% in June to 4.4% in July, and food inflation rose from 6.1% in June to 6.9% in July, despite the task force’s efforts to curb inflation.

“Clearly, inflation has become more serious, directly contradicting the claims made by both the prime minister and Annuar Musa that the anti-inflation special Cabinet committee has succeeded in controlling rising prices,” he said in a statement.

“Would Bank Negara Malaysia (BNM) have raised the overnight policy rate (OPR) if inflation was under control?”

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Calling the task force “ineffective, incompetent and irrelevant”, Lim said Annuar did not want to face the reality that it had failed and should be abolished.

He said the alternative was for Annuar to be replaced as the task force’s chairman after his attempt to deflect the blame over the OPR hike by saying he did not have the power to “interfere” with BNM’s decision.

Lim stressed, however, that he did not call for Annuar to interfere with BNM’s decision as this was within the central bank’s purview.

“Annuar is completely confused between cause and effect. It is his failure to stem rising food prices that caused inflation and the effect is that BNM had to raise the OPR in order to rein in inflation,” he said.

Annuar had earlier responded to Lim, saying he was in no position to judge the effectiveness of the task force and call for it to be disbanded following the latest hike in the OPR.

He said that as a former finance minister, Lim should know that BNM, as a monetary policymaker, made decisions without government interference.

He also said the task force had a more specific role, which was to focus on price increases, carry out research and investigations, and deal with manufacturers, wholesalers and retailers. - FMT