Malaysia Ringgit Hits Critical Lows
The Malaysian Ringgit (MYR) has been in a state of decline for the past few months, hitting critical lows against the US Dollar (USD). This has caused concern among many Malaysians, with former Prime Minister Mahathir Mohamad calling for the government to take action to control the currency.
Causes of the Decline
The Ringgit has been in a state of decline since the start of the year, with the currency falling from 4.14 MYR to the USD in January to 4.30 MYR to the USD in October. This is a significant drop, and it has been attributed to a number of factors.
The first is the global economic slowdown, which has caused investors to pull out of emerging markets such as Malaysia. This has caused the Ringgit to weaken, as investors seek out safer investments.
The second factor is the political uncertainty in Malaysia. The country has been in a state of flux since the 2018 general election, with the government struggling to pass legislation and implement reforms. This has caused investors to be wary of investing in the country, leading to a further weakening of the Ringgit.
Finally, the Ringgit has been affected by the US-China trade war. As the two countries have imposed tariffs on each other, this has caused global trade to slow down, leading to a weakening of the Ringgit.
Mahathir’s Call for Action
In response to the Ringgit’s decline, former Prime Minister Mahathir Mohamad has called for the government to take action to control the currency. He has argued that the government should intervene in the currency markets to prop up the Ringgit, and that it should also implement policies to attract foreign investment.
Mahathir has also argued that the government should take steps to reduce the country’s reliance on foreign capital, such as encouraging domestic investment and promoting exports. He has also called for the government to reduce its reliance on debt, as this can lead to further weakening of the Ringgit.
Government Response
The government has responded to Mahathir’s call for action by announcing a number of measures to support the Ringgit. These include increasing the country’s foreign reserves, introducing capital controls, and reducing the country’s reliance on foreign capital.
The government has also announced a number of measures to attract foreign investment, such as tax incentives and investment guarantees. It has also taken steps to reduce the country’s reliance on debt, such as introducing fiscal reforms and cutting government spending.
Outlook for the Ringgit
It remains to be seen whether the government’s measures will be enough to prop up the Ringgit. The currency is likely to remain volatile in the short-term, as global economic conditions remain uncertain.
In the long-term, however, the government’s measures should help to stabilize the Ringgit. If the government is able to attract foreign investment and reduce the country’s reliance on debt, then the Ringgit should be able to recover.
Conclusion
The Malaysian Ringgit has been in a state of decline for the past few months, hitting critical lows against the US Dollar. This has caused concern among many Malaysians, with former Prime Minister Mahathir Mohamad calling for the government to take action to control the currency. The government has responded by announcing a number of measures to support the Ringgit, such as increasing the country’s foreign reserves and introducing capital controls. It remains to be seen whether these measures will be enough to prop up the Ringgit, but in the long-term the government’s measures should help to stabilize the currency.