Mahathir and Pakatan are the least qualified to criticise the Ringgit’s strength
Eric See-To
One of the favourite attack topics of Tun Dr Mahathir Mohamad and his supporters against Prime Minister Najib Tun Razak’s government is the Ringgit.
However, Mahathir is the least qualified to use the Ringgit’s strength to criticise PM Najib.
When Mahathir first became Prime Minister in 1981, the Ringgit was at RM2.30 to the US$ (it was RM1.10 to the SG$ then).
Never once in the entire time under Mahathir had the Ringgit ever strengthened appreciably against the USD.
During his time, the Ringgit plummeted to as low as RM4.86 (intraday) before Mahathir pegged it at RM3.80 using capital controls – where it remained until he retired.
This means that under Mahathir, the Ringgit had weakened 65% from the day he started as PM to the time he retired — or RM2.30 to RM3.80.
And there was no sudden 80% collapse in oil prices to explain why the Ringgit weakened so strong.
When PM Najib first became Finance Minister and Prime Minister, the Ringgit was RM3.73.
The Ringgit then strengthened as much as 30% and for a brief period, our RInggit was even as strong as RM2.96 versus the USD in 2012 and 2013.
However, the USA’s intention to end their Quantitative Easing and raise interest rates as well the 80% collapse of oil prices in late 2014 saw our Ringgit dropping significantly.
Along with the recent recovery of oil prices, our Ringgit has now recovered part of its losses and is now at RM4.07 – which is 9% weaker than when Najib first became PM or 7% compared to the RM3.80 level that Mahathir had pegged it at for many years.
The recent trend also shows that the Ringgit’s recovery had gathered pace with many analysts now predicting the Ringgit will recover further to the below RM4 level.
History will tell you that Mahathir had done a poor job when it comes to the Ringgit’s strength.
Therefore, Pakatan (where Mahathir is the Chairman) and Mahathir should be the least qualified parties to criticise the Ringgit strength under Najib.
