LIM Guan Eng today asked if Putrajaya will implement the structural economic reforms suggested by the World Bank in efforts to shore up the value of ringgit.

The global financial institution had previously recommended that Malaysia take on economic reforms out from education to improve the investment climate.

“To shore up the value of the ringgit, the World Bank had recently recommended that fiscal and structural economic reforms be carried out from education to improving the investment climate to make Malaysia more productive and competitive.

“However, there is no point in having expert economists if their advice is not adopted by the government. The advice comes at an appropriate time following DHL Express Malaysia’s announcement on September 26 of an average price increase of 7.9% in 2023 compared with this year due to rising inflation and depreciating ringgit,” said the DAP chairman.

According to Lim, the reason cited by DHL for imposing an increase next year in logistic costs essential for the exports industry, especially manufacturing, is a sure sign of failure by the government to check inflation as well as arrest the decline in the value of the ringgit.

Lim then took a swipe at the government for having Annuar Musa – who he deemed as a failed minister in his efforts as the chairman of the Special Task Force on Jihad Against Inflation.

Lim said Annuar should have just resigned and let Prime Minister Ismail Sabri Yaakob take over because the Ketereh MP failed to stem inflation. 

“As a result of his failure to stem inflation, Bank Negara Malaysia (BNM) has increased the Overnight Policy Rate (OPR) by 25 basis points to 2.5%. BNM also has no confidence in Annuar’s ability to fight inflation and is expected to increase the OPR in their next two meetings in November this year and January next year to at least 3% or higher.

“Annuar is clearly ignorant of the adverse impact of the strong US dollar on our trade transactions and the fact that 80% of our exports and imports are invoiced in US dollars. The weak ringgit will further escalate our food import bill, which amounted to RM63 billion last year and negatively impact food prices paid by the rakyat,” the Bagan MP said.

The ringgit retreated from last week’s gains to open lower against the US dollar today amid mixed market sentiments as investors continue to seek the safe-haven greenback.

At 9am, the local currency eased to 4.6400/6445 against the greenback from Friday’s close of 4.6360/6390.

Meanwhile, the ringgit traded mostly higher against a basket of major currencies.

It rose against the British pound to 5.1657/1707 from 5.1728/1762 last week, gained against the Japanese yen to 3.2049/2082 from 3.2103/2126, and appreciated versus the Singapore dollar to 3.2323/2359 from 3.2343/2368. – October 3, 2022.