Implementing a fixed exchange rate for the Ringgit could have adverse consequences for Malaysia’s ability to sustain its monetary policies.
Such a move would compel the Central Bank of Malaysia (BNM) to raise the Overnight Policy Rate (OPR) to match the interest rates in the United States.
Deputy Finance Minister Ahmad Maslan emphasised the government’s unwavering position against pegging the Ringgit.
During a recent session of oral questions in the Dewan Negara, Ahmad Maslan pointed out that pegging the currency would erode confidence and competitiveness, discouraging potential investors from entering the market.
The depreciation of the Ringgit’s exchange rate is currently influenced by the strengthening of the US Dollar, as well as the devaluation of regional currencies such as the Japanese Yen, Thai Baht, Korean Won, Chinese Renminbi, and Philippine Peso.
ENDS
