JOHOR BARU, May 29 — Johor PKR’s Hassan Abdul Karim reminded Bank Negara Malaysia (BNM) today of its duty to give an honest assessment to Prime Minister Datuk Seri Anwar Ibrahim on the current depreciation of the ringgit.
The Pasir Gudang MP said the central bank’s role is to assist the government of the day in managing the ringgit’s value to avoid a negative impact on the economy.
“Malaysia still imports most goods from abroad and at the same time has debts owed to various foreign parties. This in turn affects the country’s economy, the cost of living and our national debt,” said Hassan in a statement last night.
“With that, BNM’s governor [Tan Sri Nor Shamsiah Mohd Yunus] needs to be forthright with the prime minister and the Cabinet regarding the state of our country’s economy and finances, both of which are closely linked to the people. Knowing the truth is important despite it being bitter.”
The veteran Johor politician was commenting on BNM’s ongoing management of the declining ringgit and the country’s economy.
He was also believed to be responding to Nor Shamsiah’s view yesterday that the recent overnight policy rate (OPR) hike was not prematurely done, but was instead a carefully considered move to pre-emptively bring down inflation rates in Malaysia.
Hassan explained that a frank assessment by BNM was important for Anwar, who is also the finance minister, to initiate recovery measures by the government.
Based on Thursday’s report by the Economy Ministry’s Department of Statistics Malaysia (DOSM) on the Leading Index, he made it clear that the country’s economy will be underperforming due to a projected slow economic growth for the third quarter of the year.
“Therefore, BNM’s governor needs to identify the real issues (plaguing the economy) to the government. Don’t make overtly positive statements saying that Malaysia’s economy is on the right track and growing. This includes the claim that the ringgit’s declining value is only temporary and under control.
“The people are also not easily swayed by such sweeping statements anymore. Malaysians are now very capable and have the latest information at their fingertips,” he said.
Hassan, who is a social activist and lawyer, said BNM needed to be more specific in their explanation regarding fiscal policies.
He gave an example of the recent increase in OPR where BNM said that it would strengthen the value of the ringgit, but the value is still falling despite several hikes.
Hassan gave another example, citing last Friday’s currency rates on the value of one US dollar to RM4.63, and said BNM cannot just brush off the matter that the ringgit’s fall was due to external factors beyond their control.
“BNM said our currency’s decline was in line with the depreciation of other foreign currencies. So, why is it that the Singapore dollar and the Indonesian rupiah rose in value instead?” he added.