The Malaysian ringgit floating system is appropriate when security and stability in the country is maintained, said former Prime Minister Tun Dr Mahathir Mohamed.
He said political instability or weak economic management would provide space and opportunity for unscrupulous parties to manipulate the ringgit, thus causing the depreciation of the currency.
"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.
Dr Mahathir said this when delivering his talk at the Global Leadership Series titled Vision 2020, Mistakes Made, Lessons Learnt and Ways to Move Foward here, today.
The ringgit was pegged at 3.80 to the US dollar in 1998 after the local unit substantially depreciated during the 1997 Asian financial crisis.
Dr Mahathir who resorted to peg the ringgit said 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 said.
Meanwhile, Dr Mahathir said the goal of becoming a developed nation by 2020 which is only five years away was still relevant, but stressed that Malaysia needed to achieve the status on its own mould and not take after the developed countries in the West.
The former prime minister pointed out that to be a developed nation did not only mean wealth, but Malaysia had to ensure its intelligence, education and industries were sophisticated.
"People in Malaysia must get good education, or one or two to receive Nobel Laureates or at least well recognised for his contribution...that is developed nation," Dr Mahathir said.
Bernama
Sat Apr 04 2015
The ringgit was pegged at 3.80 to the US dollar in 1998 after the local unit substantially depreciated during the 1997 Asian financial crisis.
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