Malaysian Ringgit Faces Pressure Following Weak Performance in 2023
The Ringgit (MYR) has performed its worst since 1998 in global exchange venues, sliding 4.8 MYR per US dollar (USD) in the past month alone. Concerns have arisen from the public--particularly Malaysia’s middle class—regarding rising living costs in response to failed interest rate adjustments and regional supply shocks originating from Chinese economic disarray earlier in the year—all of which have negatively impacted the Ringgit’s presence in the global currency market.
As the nation’s monetary authorities seek solutions to strengthen the Ringgit, former Prime Minister Mahathir Mohammed suggested in a recent interview that monetary authorities should consider pegging the Ringgit to the US Dollar. If pegged, the Malaysian Ringgit would be exchanged in global currency markets for a value fixed concerning the US dollar.
Mahathir previously advocated for a hard dollar peg as a stabilization measure following the economic crisis of the late 1990s which proved successful until its abolishment in 2005. He has since stated that a present-day reintroduction of the hard dollar peg would alleviate upward price pressure and reduce value volatility. Bank Negara Malaysia has yet to comment on the suggestion.