Malaysia Matters Podcast

In his first big decision since becoming Finance Minister last week, Deputy Prime Minister Najib Abdul Razak announced that Malaysia would not re-peg the ringgit to the U.S. dollar despite calls by former Prime Minister Mahathir Mohamad who proposed it necessary to do so on Saturday to mitigate the impact of a declining dollar.

“I wish to categorically state that we have no intention to re-peg the ringgit now or in the future. We are committed to allow the market to determine the value of the ringgit,” Deputy Prime Minister Najib Abdul Razak said.

He said it was impossible for Malaysia not to be affected by the financial crisis in the United States as 20 percent of Malaysia’s exports go to the U.S. market.

Mahathir pegged the ringgit to the dollar in 1998 at 3.8 to the dollar during the Asian financial crisis. It remained there until 2005 when Abdullah Ahmad Badawi removed the peg. The ringgit is now about 3.4 to the dollar.

Najib is reportedly meeting with US fund managers in New York this week.