As Anwar enters a new week as PM, can the ringgit continue to trend upwards?

KUALA LUMPUR: The ringgit climbed 1.8 per cent against the US dollar when Datuk Seri Anwar Ibrahim was appointed Malaysia’s 10th Prime Minister on November 24.

The currency continued to rally the day after and rose by 0.8 per cent against the dollar to 4.4542, making it the best performer in the region for a second day.

Despite the initial euphoria over the end of post-election political uncertainty, Center for Market Education CEO Carmelo Ferlito expects more tests lying ahead for the economy.

“One will be the appointment of the Cabinet. We will see how the market reacts to some names that are going to occupy crucial positions such as the Finance Ministry (MoF) and International Trade and Industry Ministry (MITI).

“These will be the two key appointments that we need to monitor,” he told Astro Awani.

Carmelo added that the market would also be assessing the coalition government’s ability to work together –a first for Malaysia.

The Prime Minister’s next steps for the economy, he said, would be to present a concrete policy agenda that was clear on implementation.

Anwar must also focus on ensuring better inter-ministerial coordination, particularly among MoF, MITI and the Human Resources Ministry.

“I think we should look at a higher degree of coordination between ministries so we can have a more holistic approach to restoring Malaysia’s competitiveness for the long-run,” said Carmelo.

He also cautioned against the optimism surrounding Anwar taking over the country’s top job after a decades-long wait, adding that the “expectations put on (him) are excessive”.

Among the first things on Anwar’s agenda has been to review the government’s subsidy programme, which aims to direct more support toward lower-income groups.

Carmelo suggested for subsidised goods and services to be provided at market price, before issuing financial support in the form of vouchers according to different income brackets.

“This can create a vibrant bottom-up answer to the needs on the ground because the government can only act on the basis of an average, where a certain income bracket can receive certain support.

“Then we can allow a spontaneous market to emerge for that support to be even more targeted.”