KUALA LUMPUR, Sept 12 — The ringgit’s performance since the general election shows it has decoupled from global oil price, said Datuk Seri Najib Razak when insisting he was falsely accused of causing the currency’s devaluation previously.
The former prime minister posted two charts online detailing the historical performance of the Malaysian currency against the price of Brent Crude going back to 2010 that showed a directly inverse relationship between the two up until recently.
Najib also held up the ringgit’s recovery between 2010 and 2013, which he said was made possible because he avoided pegging the Malaysian currency in the way Tun Dr Mahathir Mohamad did during the 1997 Asian Financial Crisis.
“Never in the history of Malaysia has the ringgit recovered as much as it did when seen in hindsight. I am not praising myself as the recovery is due to high oil price at the time and not entirely because of efforts by the Barisan Nasional government and myself,” he wrote on Facebook.
“However, the stimulus package we executed parallel to the oil price increase succeeded in rescuing the economy from falling into a recession”.
Najib said when the ringgit began freefalling in 2014, he had been under pressure to reintroduce a peg on the currency’s value despite the clear relationship with declining oil prices at the time.
He claimed he rejected this after considering the consequences of Dr Mahathir’s move on foreign capital and Malaysia’s exports in 1998, and claimed he was vindicated when the ringgit rose to RM3.85 against the US dollar in April.
Expressing concern with the ringgit’s decline now, he asserted that the recent fall was not caused by a dip in oil price as this has risen to US$78 per barrel while the Malaysian currency went in the opposite direction.
“Before the general election, Pakatan Harapan leaders said ‘If Najib goes down, the ringgit will go up.’ I am perplexed because I was taken down four months ago and the ringgit is still going down.
“Whichever the case, I hope the PH government will take note of my concern about the ringgit before it becomes burdensome.
The ringgit is currently trading at 4.15 to the dollar or its lowest in 2018.