In his support remarks, International Trade and Industry Minister Muhyiddin Yassin said the government should study the suggestion to cushion off the impact of the weakening US dollar against other major currencies.
Tun and Muhyiddin are right. The fluctuations in the ringgit value had affected the country's economy and the government should not continue with the managed float of the ringgit. The value must be fixed as it would strengthen the economy and create structural changes without having to depend on the model from western experts.
“If the US economy declines, the country, which is among its key trading partners, will also be badly affected,” Dr M said.
The ringgit's RM3.80 peg against the US dollar imposed in Sept 1, 1998 was scrapped in July 21, 2005 and was operated by a managed float against a basket of currencies. Although the pegging of the ringgit by the government in 1997 is perceived to be different from the current uncertain global economic scenario, it was possible that several mechanisms in the previous pegging of the ringgit could be used again.
Muhyiddin said the uncertain global economy today is due to the sub-prime problems prevailing in the United States which resulted in several major banks in the country to go bankrupt and this scenario is different from the situation in 1997.
The government, he said needed to keep tabs on the current world economic developments and take necessary initiatives to tackle the problem.
Now, Najib... its time to be a good 'money-man'!