(Aug 12): Malaysians should brace for higher inflation at the end of the year with the current economical situation and the ringgit’s continued fall against the US dollar, Penang Chief Minister Lim Guan Eng said.

He said Malaysians must not think they will not be affected by the poorly performing currency and economy.

"The ringgit is now the worst performing currency in Asia, doing worse than the Thai baht and the Indonesian rupiah," he told reporters at his Komtar office today.

Expressing concern over the exchange rate after the ringgit reached a record of 4.0060 to a US dollar in early trade today, Lim said: "Today, the ringgit is 4.02... don't want to see (that anymore)."

Lim said the drop meant that the wealth of all Malaysians was reduced by 20%, if measured in global terms using the US dollar.

"This is how we will suffer. Don't think we won't," he said, adding that Penang's hope of being a high-income state this year had also been crushed due to the fall of the ringgit.

The opposition-run state could have made it this year with an income of RM40,841 (US$12,467) GDP (gross domestic product) per capita. But after the ringgit’s slide, the benchmark has been moved higher to RM49,245.

Lim also asked the government whether reports on the 11th Malaysia Plan and financial reports by Bank Negara Malaysia and federal bodies like the Malaysian Productivity Corporation were still relevant.

"We wonder if they are reliable because the figures would be based on the old exchange rates. They may no longer be relevant now.

"The situation a year ago is very different compared with what we are facing now... how are we to rely on this data now?" he said.

The ringgit has been falling amid weakened global demand for Malaysia's export and has hit a 17-year low.

Critics have blamed 1Malaysia Development Berhad's RM42 billion debt scandal and other controversies affecting the federal administration for the currency’s decline. – The Malaysian Insider