On the other hand, a weak ringgit might make Malaysia more competitive and encourage exports.
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Sinar Daily reported that Opposition leader Datuk Seri Anwar Ibrahim said a weak ringgit would see the rakyat working harder but earning lesser as the currency’s value falls.
The decline will cause Malaysians to be trapped in a cycle of working harder and making less while the cost of living rises exponentially.
While much of the global economic chaos of the past couple months can be blamed on a continued recovery from pandemic declines and the disruptions of the war in Ukraine, the situation in Malaysia remains dower without any turn arounds in sight while others are allowed to see a return to normalcy.Datuk Seri Anwar Ibrahim said in a statement
Anwar said Malaysia needs leadership to inspire the rakyat’s confidence before dreaming of inspiring foreign confidence and investments.
To do this, Anwar believes Malaysia needs a long-term proper economic recovery plan to help the nation get back on its feet.
The people’s work is paramount to bringing this nation back and you the people deserve reward for your labour.Datuk Seri Anwar Ibrahim
Universiti Sains Islam Malaysia (USIM) Economic and Muamalat Analyst, Associate Professor Dr Nuradli Ridzwan Shah Mohd Dali told Sinar Daily that the ringgit needs to be below RM3.80 against the US Dollar for the currency to remain strong.
If the ringgit value exceeds RM4.48, the national currency will decrease and could cause the country’s import cost to surge and further burden Malaysians.
Last week, the ringgit weakened past RM4.40 against the US dollar for the first time since the start of the Covid-19 pandemic.
Weak ringgit might not be a bad thing
However, having a weak ringgit may not be necessarily a bad thing. According to New Straits Times, the weak currency in theory would make Malaysia more competitive and encourage exports.
Bank Negara Malaysia’s move not to peg the ringgit, for now, is considered a bold and pragmatic move due to the well-capitalised banking system.
The prognosis is that it’s better to allow the ringgit to stay floated based on market demand and supply with some controls.