PRIME Minister Datuk Seri Anwar Ibrahim is expected to announce new government policies, including drastic measures, to address the depreciation of the ringgit and the topsy-turvy stock market, said Deputy Finance Minister Datuk Seri Ahmad Maslan.
“At 12pm tomorrow (June 19), PM will visit the Securities Commission and is expected that he will make an announcement regarding economic issues,” Ahmad told the media following his visit to BSN Johor.Anwar is facing pressure from the public and business circles which are criticising the government for the downfall of the ringgit and lacklustre stock market.The exchange rate of the ringgit against the US dollar is RM4.6 for US$1.Former prime minister Datuk Seri Najib Razak also took a swipe at Economy Minister Rafizi Ramli over the latter’s remark on the current position of the ringgit in the country.Najib also compared the value of the ringgit before the 14th General Election (GE14) with today’s value, which saw an 80 sen difference.Rafizi’s recent statement, suggesting that the economic situation under Najib’s administration cannot be directly compared to the current state, received a significant amount of public discontent.On the other hand, the International Monetary Fund said in April that the BNM has adopted a comprehensive approach to dealing with exchange rates and capital flow-related risks, depending on the nature of the shock.For instance, during 2014 to 2015, when the economy saw large non-resident capital flows and there was a terms-of-trade shock, the authorities allowed the exchange rate to adjust flexibly as a shock absorber.
In Q1 2020, during a period of significant non-resident portfolio outflows and sharp increases in exchange rate volatility caused by the COVID-19 outbreak, the ringgit exchange rate depreciated by about 5% vis-à-vis the US dollar.The Bank Negara Malaysia employed a targeted FX intervention (FXI) to mitigate excessive exchange rate volatility and provide sufficient FX liquidity while allowing for continued ringgit flexibility.In addition, the BNM increased its outright purchases of government securities as part of its open market operations to support orderly domestic market adjustments amid portfolio outflows and signs of market stress. – June 18, 2023
