DAP chairman Lim Guan Eng has railed against the government’s current monetary policy as it attempts to arrest the ringgit’s decline against the US dollar, saying it is doomed to fail.

The ringgit dipped to RM4.48 to the US dollar today,

In a statement, Lim, said poor policy making and frequent U-turns in dealing with the rising cost of living and inflationary pressures, severe labour shortage, and acute trust deficit in ministerial competence are driving the failure.

“Unless these issues are addressed, the ringgit will continue to decline regardless of how proactive our monetary policy is,” the Bagan MP said.

He said for the government to dismiss the ringgit’s slide as cyclical due to rising interest rates in the United States, war in Ukraine or the Covid-19 lockdowns in China, “is like an ostrich with its head in the sand, choosing to cover up their inadequacies in governance”.

Lim said with the ringgit expected to hit the psychological barrier of RM4.50 to the dollar soon, the weak Malaysian currency will “worsen domestic inflationary pressures by increasing the amount of foreign debt that Malaysia has to pay”.

The cost of imported food, energy, goods and services, Lim said, will go up which in turn will further raise the cost of living.

“It is not just against the US dollar that the ringgit has declined by year to-date. The ringgit has declined against both the Singapore dollar (4.2%) and the Indonesian rupiah (3.1%),” he said.

“As these are our major trading partners, clearly investors see Malaysia as performing worse not just one-to-one against the United States but also against our neighbours such as Indonesia and Singapore.” – August 20, 2022.