GEORGE TOWN, Jan 12 ― Bank Negara Malaysia should remove the ruling requiring exporters to convert 75 per cent of their foreign earnings to the ringgit or at least lower this to 25 per cent, Penang Chief Minister Lim Guan Eng told Putrajaya today.
In an open letter to Prime Minister Datuk Seri Najib Razak, he again repeated concerns that the measure introduced by the Financial Markets Committee (FMC) to support the ringgit's value was hurting businesses.
“The Penang state government has received many complaints from the electrical and electronic industry about the FMC ruling.
“Whilst none of the foreign multi-national corporations have indicated that they will leave Malaysia because of this new ruling, the Penang state government is concerned that it will affect new investments coming in,” he said in his letter.
Lim said the measure did not have the desired effect as the ringgit was still deteriorating in value.
He also repeated his concerns about the effects on foreign investment, saying it would deter their influx due to higher exchange and transactions costs.
Firms in Malaysia also had to bear duplicate transactions costs by repeatedly converting to and from the US dollar as much of their procurement is conducted in the de facto trade currency, he said.
Local manufacturers were already facing an extended slowdown, Lim said when citing Nikkei Malaysia's Purchasing Managers Index that showed 21 months of straight decline.
Urging Putrajaya to consider his requests, he said the continued enforcement of the ruling would dull Malaysia's competitiveness and attraction as an investment destination.
