BY: NAZLI IBRAHIM
SHAH ALAM, DEC 6: Bank Negara Malaysia (BNM) has been urged to consider alternative measures to prevent the ringgit from continuing its fall if the measures to strengthen it do not have any positive impact on the value of the national currency.
Former BNM Deputy Governor Dr Rosli Yaakob said if ringgit devaluation continues, it could reach up to RM5 for 1 US Dollar (USD) by next year.
“In the current situation, if BNM does not take concrete measures, it will not have enough reserves to buy the ringgit, which would likely result in the ringgit moving close to RM5 against USD1.
“When that would happen, we do not know. Maybe in five months, six months or one year. Even now it is already at RM4.44 against USD1,” said Dr. Rosli when contacted by SelangorKini.
Clearly, other factors driving the continued weakening of the ringgit include the price of international petroleum that has remained below USD50 per barrel, making it unlikely that ringgit will rebound.
He said the national debt is increasing and without strict control, the ringgit is also affected as all debt transaction can only be made in foreign currencies like the USD, which ultimately weakens the ringgit.
Besides that, the 1MDB scandal had caused existing and future investors to lose confidence in the country’s economy and currency, which exacerbates the ringgit’s performance.
“This shows that we have failed to overcome the issue regarding the loss of billions of state funds. How would new foreign investors have faith in us, same goes to the existing ones, they would also likely run away.
“These are factors which can cause the ringgit to be ‘volatile’ and move towards RM5 against USD1. We just don’t know when, it could be in the next six months or a year,” he added.
BNM has imposed a new regulation effective yesterday whereby exporters are allowed to keep only 25% of their export revenues in foreign currency while the rest must be converted into ringgit.
Exporters have six months to do that.
BY: NAZLI IBRAHIM