Pegging ringgit during COVID-19 not appropriate - Economist

Pegging the ringgit during the COVID-19 crisis is not appropriate, given the issues confronting the nation are related to health and economic integration.

Economic analyst Associate Prof Dr Madeline Berma said the COVID-19 pandemic has not only paralysed Malaysia's economy, but also that of other countries.

"We cannot equate the financial crisis that occurred in the region in 1997-1998 to the current crisis by pegging the ringgit like what we had gone through before as currency speculation is not happening now, so it is not valid to do so.

"At that time, there was a continuous exodus of foreign investors but the government at that time took steps to selectively impose barriers, but now no foreign investment is leaving the country, instead the whole world's economy grinds to a halt," he said in the Ruang Bicara programme themed "Economic Stimulus Package Spurs National Economy" on Bernama TV yesterday.

Former executive director of the Malaysian Institute of Economic Research (MIER) Prof Dr Emeritus Datuk Dr Zakariah Abdul Rashid, who was another panellist in the programme, said it was not time to peg the ringgit as the current position of the US dollar was still unknown to the world.

"The previous economic crisis that we faced was a financial crisis but what we are facing now is the real sector of the economy, which means that the impact is great because it is linked to the movement control order, namely production disruption.

"So, the problems that are happening now are unprecedented, far different and at a much larger scale than we had faced before... if we used to call it recession before, now people are starting asking whether we are going to have a great depression?" he added.

-- BERNAMA