KUALA LUMPUR, Aug 20 — The government’s attempts to arrest the decline of the ringgit is hopeless if it constantly reneges on its own policies while ignoring the rising cost of living and inflation, Bagan MP Lim Guan Eng said today.
The former finance minister observed that the ringgit is losing out not only to the US dollar but also to the currencies of neighbouring countries like Singapore and Indonesia.
“For the government to dismiss the decline in the value of our ringgit as cyclical due to rising interest rates in the United States, 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 proactive 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,” the DAP national chairman said in a statement.
He stressed that the countries named were major trading partners with Malaysia.
He warned that Malaysia’s debt will balloon further if the government does not find a way to stop the ringgit from sliding further.
He noted that the ringgit has fallen to RM4.48 against the US dollar and expects it will hit the psychological barrier of RM4.50 soon.
Lim added that the ringgit is also down against the Singapore dollar by 4.2 per cent and Indonesian rupiah by 3.1 per cent year to-date.
The ringgit traded higher against the US dollar to 4.4430/4480 when markets reopened this week on Monday, but analysts foresee a volatile session next week with the greenback growing more robust.