- The depreciation of the ringgit is largely due to the political instability plaguing the nation
Economist Prof Datuk Dr Amir Hussin Baharuddin said both political and economic stability of the country were closely linked and able to influence the value of the currency if ongoing issues were not resolved promptly.
“We need to consolidate unity within the nation to address the political problems. If the political situation remains unstable, it will give a bad perception to investors and foreign currency holders, thereby affecting the economy,” he told The Rakyat Post.
However, he said the country’s economy was currently not at a severely adverse state and could still be controlled.
He said the political turmoil needed to be addressed immediately to stem the ringgit’s decline.
“For now, the country is still solid. The state of the national economy is also good. But if the (political crisis) is not resolved within the next three months, it may be more difficult (for the nation).
“It will lead to poorer control of our currency and low crude oil prices.
“That is why we need to come together to solve the political disputes in advance as the economy is still well.
“We need to come together to improve the nation’s economy as bickering over trivial matters has a big impact on the nation and the public.”
He said the Goods and Services Tax (GST) which came into force last April, had helped the economy remain stable.
Amir said GST had been able to contribute to the economy although the rakyat felt burdened by the tax.
He said the average citizen, who did not use the ringgit outside the country, would not be badly affected by the situation.
“The rakyat who are not travelling overseas, do not have children studying abroad or are not money changers, will not be affected because they only use the ringgit domestically.
“There are not many who hold US dollars. A side effect will be higher import value of goods due to the weaker ringgit.”
Earlier, the Sultan of Johor, Sultan Ibrahim Iskandar had urged the government to resolve the decline of the ringgit immediately.
He said the government needed to tackle the political instability and economy.
Currently the ringgit is valued at RM4.2 against the US dollar.