• The Sun

Factors causing fall of ringgit

By Karen Arukesamy & Lee Choon Fai, The Sun (16 June 2015) The fall of the ringgit is due to loss of public confidence and not criticism against the government by former prime minister Tun Dr Mahathir Mohamad, said Kelana Jaya MP Wong Chen (PKR). He said devaluation of the ringgit can be attributed to the 1Malaysia Development Berhad (1MDB) controversy, increased racial and religious conflicts in the country and poor governance. "All these issues are building up to a level where people are thinking that this country is very difficult to invest in. As a result, a lot of rich people in Malaysia, which Bank Negara can confirm convert their money to Singapore dollars and park it in Singapore, Australia or Hong Kong," Wong told a press conference in the Parliament lobby yesterday. He said the trend of selling the ringgit and buying foreign currency caused a decline in demand while supply increased, thus devaluing the ringgit. Deputy Finance Minister Datuk Ahmad Maslan recently said one of the factors for the drop of the ringgit is Mahathir's criticism of Prime Minister Datuk Seri Najib Abdul Razak. Wong said the government can mitigate the devaluation by balancing trade and surplus money, but these are only temporary measures and the underlying issues must be addressed. "We do not want our currency to drop any further, but I think a lot of banking analysts think that it is only a matter of time before the exchange rate with the US dollar drop to 3.8," Wong said. Only by addressing issues of governance can public confidence be restored in the country, which will restore investor confidence, he said.