BOMBSHELL – OMG! WHAT HAS ANWAR DONE TO THE RINGGIT! – WHAT TYE OF DEJA-VU IS THIS ! – NOT EVEN A YEAR HAS TEAM ANWAR BEEN IN POWER, YET MALAYSIA’S CURRENCY HAS PLUNGED TO ITS LOWEST IN 25 YEARS – WHICH COINCIDENTALLY WAS 1998, THE YEAR MAHATHIR SACKED HIM FROM ALL POSTS – ACCUSING HIM OF MANY THINGS, NOT ONLY SODOMY BUT ALSO CURRENCY SPECULATION TO BRING DOWN THE RINGGIT!
Written by Stan Lee, Politics Now!
KUALA LUMPUR (Politics Now!) – OMG! Does Anwar know what he’s doing? Sadly for Malaysia, it looks like their prime minister doesn’t! What about his backseat driver, the DAP? Looks like the DAP doesn’t have any clue either!
Do they at least know Malaysia’s currency, the ringgit, has just hit a 25-year low – and the bottom is still nowhere to be seen!
According to Bloomberg, the ringgit plunged 0.3% to 4.7635 per dollar, the weakest since 1998 financial crisis – a landmark debacle that Anwar had the dubious distinction of being at the centre of. Then the deputy prime minister and also finance minister, Anwar was accused by his boss Mahathir Mohamad of trying to stage a political coup and triggering a speculative selloff of the ringgit to achieve his goal of taking over as prime minister.
Fast forward 25 years. Ringgit is now the worst performer in Asia this year after the yen, said Bloomberg.
So what excuses will today’s Anwar and his finally-achieved ruling coalition give now? External factors again? But factors outside of Malaysia and beyond its control has hit all other countries in Asia too – so why is Malaysia the second weakest? Why not Indonesia or Vietnam or Philippines?
MESS OF CONTRADICTIONS
What magic potion did Jokowi and other ASEAN governments develop to treat their currencies that Anwar could not or simply missed because he had no time or had no knowledge.
“This shows Anwar’s Budget 2024 carried no value with investors. They don’t see any compelling or redeeming reason to keep the ringgit,” a former head of money at a foreign bank in Kuala Lumpur told Politics Now!
“It was a mess of contradictions. For example, the Anwar administration tried to describe Budget 2024 as being a budget that finally aimed for fiscal prudence. But at RM393.8 billion, it was the largest-sized budget ever announced, so what fiscal prudence are they talking about? Then they say they can’t always be populist or the budget deficit will keep worsening – so they remove the ceiling on chicken and egg prices, raised the floor on rice prices and jacked up sales tax by 2 percentage points to 8%. In other words they cut the subsidy bill and tried to raise revenue – so why should the budget size be so massive then?”
FULL-TIME FINANCE MINISTER NEEDED – LOSS OF CONFIDENCE EXACERBATES RINGGIT, INVESTMENTS FLIGHT
Another critic calling himself ‘savemalaysia’ wrote in a letter to the press, calling for a full-time finance minister who knew what he was doing.
“Considering how the finance ministry has spent so much and got us so little makes me believe that perhaps it is time that Anwar gives up the finance portfolio to somebody who can give it their full-time attention,” said the letter.
“I think it goes without saying that matters related to finance should be handled by someone who goes to the office every day to keep track of the money. If people feel that nobody is really going to look through their accounting because the finance minister at the top of the chain of command is busy doing other things, and the prime minister is not going to bother about the finance minister not being focused on his job because the prime minister is also the finance minister, then people will start getting careless or lackadaisical about their accounts.”
Indeed, what may be happening to the ringgit, especially in the weeks ahead as concerns reappear it might breach the psychological RM5 level, can be traced back to the wider knock-on effect of a sheer lack of confidence in team Anwar!
As the saying goes, the boaster has boasted, the braggart has bragged – but unfortunately, nothing, zero and zilch that he has touched has shown any signs of a pulse or returning life.
ANWAR LOOKING AT PAS TO SAVE HIS POLITICAL SKIN?
Against such a troubled background, it might be no coincidence that Anwar has been busy making overtures to PAS, the most powerful political party in the country today but feared due to its often hardline religious extremism.
If PAS joins Anwar’s unity government, it might let Anwar stay on as PM until 2027, when a new general election must be called. But while this helps Anwar to hang onto his PM post, what good can it bring Malaysia? In the eyes of many pundits, investors are likely to further avoid the country or trim their local holdings even more!
“The worry is Malaysia will turn ultra conservative and Islamic laws will come to the forefront with civil law as we know it falling into the background. There will be winners but for each winner, maybe there will be 100 losers?,” said the banker.
“Many will try to get out because the thing with extremist regimes is they will always act on whim and impulse. No serious investor that I know can put up with this. For sure, they will get out first and then after a while, it may be even years before they come back, provided that PAS leaders show themselves to be steady and moderate in policies.”
POLITICAL INTERFERENCE? – EXACTLY WHAT ANWAR & DAP ACCUSED MAHATHIR, NAJIB, MUHYIDDIN & ISMAIL SABRI OF DOING!
Meanwhile, it didn’t help that Malaysia also posted six straight months of decline in exports in August – and miserably for Anwar, the entire period under his watch.
The central Bank Negara Malaysia’s decision to pause interest rate hikes since July also added headwinds for the ringgit, as many other central banks have sounded that they are still unsure the global upcycle for interest rates is really over.
Many players in the local money markets have pointed the finger at political interference, with not just Anwar supporters but also the DAP calling for lower interest rates.
“This is insane, and completely crosses a red line if true. I would believe Bank Negara wants to keep rates tight but has been warned not to hike again.” said the banker.
“Even though higher rates might be painful to businesses and borrowers, there is a reason and function for rate hikes. You don’t follow economic laws of supply and demand, you pay the price – as simple as that!”
Indeed, keeping the local overnight policy rate at 3% – a record discount relative to the upper bound of the U.S. federal funds rate target band of 5.25% to 5.5% – has contributed to the ringgit’s freefall.
According to Mizuho Bank Ltd Singapore’s head of economics and strategy Vishnu Varathan, the ringgit’s underperformance has been due to “real rate spreads that could turn a lot more unfavourable, especially as the subsidy rollback hits inflation and reveals softer real policy rates”.
“Policymakers face a trade-off between economic headwinds from higher rates or the risk of not responding and endangering macro and ringgit stability,” he was quoted as saying. – Written by Stan Lee, Politics Now!
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