Float ringgit when country secure, politically stable, says Dr M

The ringgit floating system can be introduced again only if the country is politically stable. – The Malaysian Insider filepic, April 4, 2015.

The Malaysian ringgit floating system is appropriate when security and stability in the country is maintained, former prime minister Tun Dr Mahathir Mohamad told Bernama today.

He was quoted as saying, political instability or weak economic management would provide space and opportunity for unscrupulous parties to manipulate the ringgit, thus causing the currency to depreciate.

"What we have to do to ensure that the ringgit does not continue to depreciate is make sure that the politics and economic management of this country is well.

"Of course we can fix the currency rate but if you want to float it, please ensure that this country is peaceful, stable, the laws are followed, no corruption, and politics of this country is stable."

He said this when delivering his talk at the Global Leadership Series titled “Vision 2020, Mistakes Made, Lessons Learnt and Ways to Move Forward” in Cyberjaya today.

During the Asian financial crisis in the late 90's, the ringgit was pegged at 3.80 to the US dollar in 1998.

Dr Mahathir, who resorted to peg the ringgit, told Bernama the government had to fix the rate at 3.80 to the dollar at that time due to competition from neighbouring countries.

"Why 3.80? If you make the currency too strong, we cannot compete with each other, so we were stuck at 3.80 per US dollar and that remained fixed for a longer time, and because of that our currency became stable.

"We recovered much faster than other countries and now even those who condemned us are saying we did the right thing," he was quoted as saying.

He added that it was still possible for Malaysia to achieve developed nation status by 2020, but the country had to ensure its intelligence, education and industries were sophisticated.

"People in Malaysia must get good education, or one or two to receive Nobel prizes or at least well recognised for his contribution... that is developed nation," reported Bernama