PETALING JAYA -- Tun Dr Mahathir Mohamad today proposed that Malaysia reintroduce the currency peg his administration imposed during the Asian financial crisis in the late 1990s.
"Many people believe the Ringgit is undervalued and the reason why it is depreciating is because currency traders are selling Ringgit and making a lot of profits from their trade.
"Remember how the devaluation of the Ringgit stopped when we pegged the currency and how we recovere. Even other countries were able to avoid the depreciation of their currencies being manipulated by currency traders," he said in a Facebook post.
If the Ringgit is allowed to depreciate, the former prime minister said, it may result in Malaysian exports becoming cheaper, and imports costing more, resulting in a higher cost of living.
Dr Mahathir however acknowledged that there would be problems in pegging the Ringgit, as there were before.
"We set up special committees to deal with refinancing banks, dealing with non-performing loans and payment of debts. The people who handled these problems are still around.
"So why not consider fixing the exchange rate to solve the problem of the Ringgits? We have enough savings and reserves in foreign currency, including the US dollar to finance imports," he said.
During the Asian financial crisis, the government under Dr Mahathir's leadership pegged the value of the Ringgit to RM3.80 to the US dollar.
This was done between 1998 and 2005 to address the Ringgit's volatile fluctuations at the time. -- The Vibes, September 12, 2023
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