(MalaysiaKINI) Deputy Prime Minister and newly appointed Finance Minister Najib Abdul Razak today denied the government was considering a move to re-peg the ringgit.
"There have been statements speculating on the re-pegging of the ringgit. I wish to categorically state that at this stage, we have no intentions of re-pegging the ringgit now or in the future.
"We are committed to allow the market to determine the value of the ringgit," he told a press conference.
Najib, who took over the finance portfolio from Prime Minister Abdullah Ahmad Badawi last week, also said the cabinet has yet to decide on whether to further reduce petrol prices.
He told reporters, who had asked if it was true plans were afoot to cut prices before the Hari Raya holidays, that they would have "to wait a few more days".
The government last month lowered pump prices by 15 sen or 5.6 percent to RM2.55 per litre in a bid to appease the public, unhappy with an earlier decision in June that saw fuel prices hiked by as much as 78 sen.
Dr M calls for pegging
Speculation about an impending re-peg had swirled after former prime minister Dr Mahathir Mohamad called on the government to reintroduce the mechanism over the weekend.
The rumours gained further ground - taking on a political hue and even sparking fears it may be a prelude to possible emergency rule - after International Trade and Industry Minister Muhyiddin Yassin joined in Mahathir's call for a re-peg.
Of late, both Muhyiddin and Mahathir have been in the news for pushing a bid to oust Abdullah from the premiership as well as from the presidency of Umno, the country's most powerful political party.
They have repeatedly called on the 68-year-old premier to step down in favour of Najib, whom many party watchers believe may be more effective in suppressing a growing challenge from opposition icon Anwar Ibrahim.
Mahathir, also a former finance minister, had argued a peg would lessen the effect of the global slowdown on the local currency, which has lost more than five percent in value since the start of this year.
Position still defensible
But though Najib admitted the effects of the global slowdown would be felt, he said the country's resilience would help it to withstand the negative impact.
"Despite shakeups and turbulence in the global financial markets, Malaysia's position is still defensible because the country still has strong fundamentals," said Najib.
"The country's exposure in the world financial markets is limited. Our monitoring, surveillance and supervision is also better," he added.
The outspoken 82-year-old Mahathir had together with Second Finance Minister Nor Mohamed Yakcop orchestrated the overnight banning of overseas trading in both local shares and the ringgit during the Asian financial crisis.
They also imposed a slew of capital controls in a bid to stop capital flight from the country.
The ringgit was fixed at RM3.80 to the US dollar on Sept 1, 1998. Unpopular with investors, the peg was finally scrapped on July 21, 2005 and the ringgit is now on a managed float against a basket of currencies.
At 2pm, the ringgit was higher, trading around 3.4302 against the greenback's close of 3.4570/4620 on Friday.
On track to hit growth target
Najib officially took over his new portfolio at the Ministry of Finance today.
Besides meeting ministry officials, the former defence chief also held meetings with officials from the Securities Commission, Bursa Malaysia, Bank Negara, Khazanah Nasional, EPF and Permodalan Nasional Berhad.
One of the first tasks the deputy premier will work on, he said, will be to ensure that the "global economic development will not affect the Malaysian economy".
Hence, monitoring systems will be stepped up to ensure that the country's "real economy will be affected", said Najib.
The government, he added, is still confident of achieving a growth rate of 5.7 percent.
No comments:
Post a Comment