Malaysia’s former Prime Minister Tun Mahathir Mohamad said the ringgit risks renewed attacks by speculators if successor Datuk Seri Najib Razak proceeds with proposals to scrap capital controls imposed during the Asian financial crisis.
“If we fully free the ringgit, the risk of being attacked by currency traders will once again be faced by us,” Mahathir wrote in a post on his blog today. “Do we really want to have the financial crisis once again?”
Mahathir imposed restrictions on ringgit trading to help steer the nation through the 1998 crisis. He blamed the currency’s slide at that time on investors, including billionaire financier George Soros, whom he labeled a “moron” who was trying to destroy growth through speculative attacks on the exchange rate.
Najib said he’s open to allowing offshore trading of the currency in an interview with CNBC, Bernama reported on September 11. That will help boost investment and address a drop in Malaysia’s competitiveness, International Trade & Industry Minister Mustapa Mohamed said on September 14, confirming a review was underway.
Malaysia has already lifted some of the curbs, most recently allowing domestic companies to settle cross-border transactions in ringgit and exporters to hedge currency risk beyond a previous 12-month threshold. Even so, a ban on trading of the currency overseas remains.
“The present financial crisis in the world is due to the abuse of regulations in the financial market,” wrote Mahathir, who led Malaysia for 22 years until 2003. “No positive steps have been taken so far to regulate it. Certainly, currency trading remains unregulated and selective.”
The ringgit has rallied 10.2 per cent against the dollar this year and touched a 13-year high of 3.0969 on September 13, according to data compiled by Bloomberg. It was little changed at 3.1065 as of 1:17 pm in Kuala Lumpur.
Malaysia slipped two rungs to 26th in the 2010 Global Competitiveness Index published by the World Economic Forum on Sept. 9. Singapore, Japan, Hong Kong, Taiwan and South Korea were ranked higher. -- Bloomberg
Read more: Mahathir warns of ringgit attack http://www.btimes.com.my/Current_News/BTIMES/articles/20100917132529/Article/index_html#ixzz0zn9LX0Sx
No comments:
Post a Comment