FMM backs govt's de-dollarisation push as ringgit weakens

 

The Federation of Malaysian Manufactures (FMM) voiced support for the government’s effort to encourage de-dollarisation in trade.

This came after the ringgit fell to its lowest level in 26 years on Jan 22, at 4.728 against the US dollar.

FMM president Soh Thian Lai said Malaysia had previously been able to capitalise on events such as the US-China trade war to attract foreign businesses.

However, he said those businesses usually need to import materials and goods and a weaker ringgit means more costs.

“This would also slow down capital investment and industrial upgrading as well as burdening both consumer and competitiveness,” he told Malaysiakini.

Hence, Soh said that de-dollarisation to decrease reliance on the US dollar is a welcome effort.

Federation of Malaysian Manufactures president Soh Thian Lai

He also said that based on their survey conducted last year, more companies are moving away from the US dollar and exploring the use of alternative currencies such as China’s renminbi, the Japanese yen and the euro.

On Oct 10, the government announced the de-dollarisation initiative in response to the weakening ringgit at the time.

The country has already begun trading with China, Indonesia and Thailand using local currencies in its transactions.

Need better policies

Meanwhile, Soh said this year will remain challenging for the manufacturing sector and called for support to reduce the impact of the weakening ringgit and global inflation.

He said this can be done by creating a business-friendly environment with policies that are simple, transparent, reliable, easy to comply, consistent and fair.

“This is why the government needs to engage with the industry players,” he added.

Among the policies mentioned by Soh are those that could contain cost increases and reduce regulatory burdens, new free trade agreements, promotion of “Buy Made in Malaysia” products, and enhanced human capital policies including those relating to expatriates and migrant workers.

In response to the ringgit’s record plunge, former prime minister Muhyiddin Yassin, on Tuesday, criticised Prime Minister Anwar Ibrahim for an alleged lack of policies meant to tackle the worsening economy.

He accused Anwar of being more focused on political survival than the people’s welfare. - Mkini