Tun M: Repeg Ringgit To US Dollar
Author Avatar
(Image: Utusan Malaysia)

Tun Dr Mahathir Mohamad has proposed for the government to once again employ a currency peg in addressing the ringgit’s current fluctuation in the foreign exchange market. This method – which was first introduced by the former prime minister during the Asian financial crisis (AFC) back in 1997 – will see the ringgit pegged at RM3.80 to the US dollar (US$).

Tun Dr Mahathir remarked that the ringgit’s fluctuation is caused by the fact that its value is not fixed and guaranteed by the government.

“When we set the value of the ringgit at RM3.80 per US dollar, and we guarantee the supply of US dollars to anyone willing to pay RM3.80 for 1 US dollar, then the value of the ringgit will no longer fluctuate. Even currency traders could not affect the ringgit by dumping it to depress its value,” said Tun Dr Mahathir, adding that it is even more crucial for the ringgit’s value to be stabilised now amidst the ongoing global economic uncertainty.

malaysia landscape
(Image: The Star)

The former prime minister also stressed that a currency peg at this point in time will also offer some security to businesses that must transact and deal in foreign currency. Without the peg, they could be heavily affected by the severe fluctuation in the ringgit’s value, he said.

Finally, Tun Dr Mahathir acknowledged that while this policy was heavily criticised when it was introduced during the AFC, financial institutions such as the World Bank and International Monetary Fund eventually agreed that it helped to restore the country’s finances. The peg was eventually lifted in 2005.

To note, Malaysia’s currency recently saw a sharp decline of 4.3% in value against the US dollar since March 2022; it is currently trading at about 4.38 to the dollar, as compared to about 4.20 during the start of 2022. This decline is attributed to the likelihood that the US Federal Reserve may soon raise interest rates, in a move to tighten its monetary policy.

(Sources: Malay Mail, Free Malaysia Today)

0 0 votes
Article Rating

SHARE

Comments (1)

Subscribe
Notify of

1 Comment
Inline Feedbacks
View all comments
Siva
2 months ago

Good write up

Top Personal Finance News Articles
Post Image
Petrol Price Malaysia Live Updates (RON95, RON97 & Diesel)
The RinggitPlus Team
- 10th August 2022
We provide weekly updates on every Friday at 5pm on the prices of RON95, RON97 and Diesel in Malaysia and a chart that shows the movement of fuel prices across a 6-week period. Bookmark this page now!
Post Image
Astro 4K Ultra HD Broadcast To Be Available For Subscription By The End of This Year
Brian Chung
- 14th August 2018
By the end of 2018, Astro customers will be able to watch football matches in Ultra HD. Read on to know more about the 4k Ultra HD service.
Post Image
Touch n Go RFID: What Malaysian Road Users Need To Know
Jacie Tan
- 10th August 2018
Everyone’s talking about Touch ’n Go RFID being used at Malaysian highway tolls soon – here’s what you need to know about it.
Post Image
Best High Interest Savings Accounts In Malaysia (May 2022)
Pang Tun Yau
- 31st May 2022
Make your money work for you by depositing them into the best high-interest savings accounts in Malaysia!

Related articles

Related Posts Image
Related Posts Image
Related Posts Image
Related Posts Image