M.Krishnamoorthy
A media coach, adjunct professor and author
The Central Bank cannot intervene in the forex market effectively as it has insufficient reserves, said Gopala Krishnan, former Deputy CEO of a bank.
“Previous such efforts by Bank Negara to intervene have been futile. In addition, the government has been reluctant to raise interest rates as the business community will complain, and so will the public. As the FED kept raising interest rates to fight inflation, many funds flowed out of Malaysia.
“Simultaneously, several currencies globally have lost ground to the USD, like the Japanese Yen, Indian Rupee and others. So, it is not surprising that Ringgit had also lost ground.”
Gopala, head of Treasury and Investment Banking with a local bank, said: “The strength of a currency is also reflective of investor confidence. The mundane stock market, lack of promised reforms, political instability, the role of GLCs in the economy, and other factors all indicate a loss of investor confidence.
“This resulted in mounting deficit and high level of Federal borrowing, resulting in the inability to pump prime the economy. It can also be attributed to the lack of talent, which is a primary concern compared to many countries in the region,” Gopala told Newswav.
Other economists expressed that the continued implementation of the National Economic Policy (NEP) also prevents local businesses from making significant investments. There is heavy dependence on foreign investments, while little is done to promote local investments.
Countries such as Taiwan and Korea increased their economies by promoting local businesses with little foreign direct investments.
Meanwhile, the New Straits Times reported the Ringgit's decline to 4.8 against the US dollar recently is a symptom of the fall in Malaysia's competitiveness since the Asian Financial Crisis (AFC) in 1998 and the 1Malaysia Development Bhd (1MDB) shock, says World Bank lead economist for Malaysia.
Freelance Writer M. Krishnamoorthy (www.imkrishna.net) is a media coach, adjunct professor and undercover journalist. He has freelanced with Bernama, NST, The Star, and Malaysiakini. He also freelances as a fixer/coordinator for CNN, BBC, German and Australian Television networks and the New York Times. As an undercover journalist, he has highlighted society's concerns.
M. Krishnamoorthy is a content creator under the Newswav Creator programme, where you get to express yourself, be a citizen journalist, and at the same time monetize your content & reach millions of users on Newswav. Log in to creator.newswav.com and become a Newswav Creator now!
The User Content (as defined on Newswav Terms of Use) above including the views expressed and media (pictures, videos, citations etc) were submitted & posted by the author. Newswav is solely an aggregation platform that hosts the User Content. If you have any questions about the content, copyright or other issues of the work, please contact Newswav.
