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Let’s Support Tun M’s Call to Peg Ringgit to US Dollar Before We Become A Banana Republic.
By Mihar Dias
(C) Copyright May 2022
We are with Tun M in calling for pegging of the ringgit to the US dollar at RM3.80 per dollar.
We have done this 20 years ago to stave off the Asian financial crisis. It was a controversial policy Tun M adopted then but it stopped the ringgit from spiralling downwards.
More recently, the former PM observing that the ringgit is sliding against the dollar reportedly called for the pegging yet again to stop the fluctuation in the value because it is not fixed and not guaranteed by the government.
The latest (12 May) exchange stood at RM4.39 to the dollar compared to RM4.3850 a day earlier.
Malaysians are now in a state of despair. No matter how hard we work they say, our earnings in ringgit are not worth the amount compared to our compatriots across the Causeway where the Singapore dollar is equal to RM3.15. There an ordinary cleanest might earn as much as RM10,000 per month.
Tun said, “When we set the value of the ringgit at RM3.80 per US dollar, and we guarantee the supply of US dollars to anyone willing to pay RM3.80 for 1 US dollar, then the value of the ringgit will no longer fluctuate.”
When that was fixed “Even currency traders cannot devalue the ringgit by selling it in large quantities.”
Tun M recounted that during the Asian financial crisis of 1997-98, when the value of the ringgit fell because of speculation by currency traders, he pegged the ringgit at RM3.80 to the dollar to check speculators who had caused the plunge in Asian currencies, which resulted in a financial crisis across the Asian region. The peg ended in 2005.
While his action in 1998 was initially criticised, the World Bank and the International Monetary Fund later acknowledged that the policy halted fluctuations in the value of the ringgit. In fact, they recognise that it helped restore the country’s finances.
Repeating what Tun did in 1998 might help our ringgit from sliding further. If we were to sit back and hope for the ringgit to get better, it won’t.
Believe me, no prayers or miracles will restore the ringgit to its former glory. Only a policy change would help stop the slide.
Come on let’s stop the slide before we become another basket case or a banana republic, like some in Africa. Neither do we want to become like Argentina at its worse, where the citizens had to carry a sackful of money just to buy a loaf of bread.
If we could raise the minimum wage to RM1,500 per month at a stroke of the pen, we could do likewise in fixing its value.
Mihar Dias is a content writer under Headliner by Newswav, a programme where content creators get to tell their unique stories through articles and at the same time monetize their content within the Newswav app.
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