Thursday 28 Mar 2024
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KUALA LUMPUR: The government will not resort to extreme measures such as imposing capital controls or pegging the ringgit, Deputy Finance Minister Datuk Chua Tee Yong told parliament today.

Chua acknowledged that the fall in the country's income from oil (40% in 2009 to 30% lately), and a weakening of the ringgit against the US dollar (down 13.9% Sept 2014 - Mar 27 2015), had fuelled speculations over whether the government planned to peg the ringgit as it did during the 1997-1998 Asian financial crisis.

Explaining the move was not needed, Chua said: "In 1997, the country's reserves was only RM60 billion but now our reserves have increased to RM386 billion.

"Seeing all these, the government is not looking at plans to undertake the same capital (capital control) measures during the Asian financial crisis.

"Extreme measures like pegging of the ringgit is only for situations that warrant extreme measures.

"The fluctuation of the ringgit currency is something that is not out of the ordinary especially during times when the global economy is faced with challenges," he said in reply to Kalabakan MP Datuk Seri Abdul Ghapur Salleh.

Abdul Ghapur had asked if in the worst-case scenario, the government planned to impose capital controls or hedging of the ringgit like it did before.

Moreover, Chua also stressed that despite the challenges, economic activities and finances of the country had not been affected.

To recap, Malaysia introduced capital account controls amid the Asian Currency Crisis in 1987/88.

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