Mahathir pushes for pegging ringgit to US dollar as Malaysian currency keeps sinking
- Former prime minister said bringing back the policy he implemented during the Asian financial crisis could help reduce cost of living
- The ringgit is the worst performer in emerging Asia this year, sliding almost 8 per cent against the US dollar
“It’s something to be considered,” Mahathir said in an interview on Wednesday in his office in the administrative capital of Putrajaya.
The currency may slide a further 5 per cent to a record-low 5 per dollar, Mahathir, now 98, said in the interview. “Just imagine what that would mean to your cost of living,” he said, adding that pegging the currency would help to alleviate price pressures.
Malaysian assets have suffered this year as surging US interest rates have siphoned funds back to the world’s biggest economy.
Bank Negara Malaysia has held its key rate at 3 per cent since July, putting the gauge at a record discount to the upper bound of the Federal Reserve’s benchmark. At the same time, sputtering growth in China, Malaysia’s biggest trading partner, has weighed on its exports.