KUALA LUMPUR: Prime Minister Datuk Seri Najib Razak yesterday blamed the country’s political atmosphere as among the reasons that led to the spiralling of the ringgit against the US dollar.

Writing on his blog, Najib, who is also finance minister, said Malaysia was recently shocked by the fall of the ringgit, and listed out several factors as the cause of the decline.

“The existence of political play and intense speculation has resulted in an uncertain sentiment towards the administration,” he wrote, adding that China’s move to devalue the yuan also caused the ringgit as well as other Southeast Asian currencies to fall.

Najib’s announcement came as the ringgit becomes Asia’s worst-performing currency this year. It dropped 12.5% against the US dollar and weakened beyond RM4 to a US dollar for the first time since 1998 yesterday, spurred by the yuan devaluation.

Another reason for the ringgit’s decline, Najib said yesterday, is the expectation that the United States will raise its interest rates, which will make investors around the world move their funds to the US dollar.

He added that the drastic decline in the prices of commodities, such as crude oil, palm oil and rubber, also contributed to the plunge, more so because Malaysia is a producer of these commodities.

Najib, however, remained positive and said despite the challenges, the growth rate of the economy was still stable.

“In its latest report, Bank Negara Malaysia showed that economic growth remained on a stable foundation with a growth rate of 4.9% in the second quarter of 2015,” he said.

Najib promised that Putrajaya would do its best to address the problem.

“I guarantee that the government will do its best to resolve this situation with the purpose of stabilising the country’s economy,” he said. — The Malaysian Insider

This article first appeared in digitaledge Daily, on August 14, 2015.