WE NEED NEW POLICIES TO REVIVE THE RINGGIT – BANK NEGARA CHIEF TALKS TOUGH TO NAJIB REGIME

SUBANG – Bank Negara Malaysia (BNM) governor Datuk Muhammad Ibrahim has asserted that the adjustment of the local currency should be viewed from a long-term perspective and not short-term.

He said in the short term, the exchange rate movement could be a reaction to news headlines and market sentiments, instead of reflecting the underlying strength of the economy.

“What is important, therefore, is to ensure the availability of ample reserves, maintaining strong economic fundamentals and managing our exposure to external debt,” he said at the Malaysian Institute of Economic Research’s 30th anniversary dinner on Monday.

Muhammad said global concerns over monetary policy normalisation by the Federal Reserve continued to impact the ringgit.

He said the ringgit’s volatility since September 2014 had exceeded levels in previous episodes of sharp adjustment such as the European Sovereign Debt Crisis and Taper Tantrum.

“The weak ringgit was further amplified by the misperception about Malaysia’s reliance on commodities and our position as a net oil exporter,” he said.

Meanwhile, Muhammad said Malaysia needed to reawaken growth, reignite productivity and restore inclusiveness to secure continued and sustainable progress, as well as navigate current global landscape.

“Having a sub-par growth for nearly a decade now, policy makers need to relook at what we have learnt and rethink our approaches from fiscal to monetary policies and structural issues that need to be addressed, to enable us to remove any impediments to growth.

“We need to enact policy that enable the private sector revive their dynamism and explore new strategies to enable them to engage and uncover productive investment opportunities,” he said.

Muhammad said policy makers and the private sector should also automate and adopt technology to increase productivity and dispense with the easy way out by depending on low-cost labour model for competitiveness.

He said public and private sector leaders must help boost labour market participation across genders, creeds and nationalities and cushion any negative social costs that may arise as a by-product of growth. – Bernama

.