Revert to Ringgit peg to stabilise currency, says analyst

The government has been urged to revert to the system of pegging the to counter its current depreciation and enable it to .

Shukri Shuib, who is a senior lecturer in and international studies at Universiti Utara Malaysia, said it was crucial to peg the because its sliding value could push up import costs, thus impacting the prices of essential goods.

"The fluctuating Ringgit will not only have a bearing on international if left uncontrolled, it can lead to higher cost of living, and could become one of the factors behind the disruption of the three universal functions of politics, economy and social.

"The decline in the Ringgit's value is not something for Malaysia to be proud of. It's undeniable that it can have repercussions on the nation's economy, and even the World Bank had reportedly warned that the strengthening of the US currency could pose a threat to the world's economic performance," he told Bernama.

5pm Wednesday, the Ringgit - which had hit a 10-year low on Monday - strengthened slightly when it closed at 3.7480/7530 against the US dollar, compared with 3.7740/7770 yesterday.

Shukri said measures to address the sliding value of the Ringgit should be implemented soon in view of the nation's dependence on imports.

"Malaysia is a trading nation, as deals with the buying and selling of goods, as well as services. The international buying and selling process is not only subject to the nation's also its exchange rate in international markets.

"There are some who strongly feel that we should become an exporting nation and use only local goods and services. But is this possible? Can our country afford to be that independent (without having to depend on imports)?" he asked.

Shukri the depreciation of the Ringgit has turned Malaysia into a more attractive tourist destination and shopping hub, it also contributed to escalating costs for Malaysians.

"There's little point in the nation garnering an income of RM104 billion from the tourism industry when millions of Malaysians are experiencing the negative effects of the Ringgit's depreciation," he added.