Malaysia wants to be great again, at least in foreign exchange. The nation's currency recently approached a level seen as near-catastrophic during the Asian financial crisis of the late 1990s. Authorities insist the ringgit is way too cheap and blame forces outside the country, chiefly high interest rates in the US. The remedies are modest, compared with the shock therapy meted out a couple of decades ago.

This time around, the government and the central bank have been careful not to encourage talk about reviving the radical solutions employed by former prime minister Mahathir Mohamad a generation ago: capital controls and pegging the ringgit. The treatment worked then, in the sense it wasn’t the disaster that was widely predicted. By insulating the domestic economy, the steps staved off the need for an International Monetary Fund rescue. They also allowed Mahathir to purge his deputy and finance minister, Anwar Ibrahim, now the current premier, who favored a more conservative response to the crisis. By ring-fencing markets, Mahathir could move without huge backlash from international capital.

QOSHE - It’ll Take More Than Patriotism to Save Malaysia’s Currency - Daniel Moss
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It’ll Take More Than Patriotism to Save Malaysia’s Currency

8 1
27.03.2024

Malaysia wants to be great again, at least in foreign exchange. The nation's currency recently approached a level seen as near-catastrophic during the Asian financial crisis of the late 1990s. Authorities insist the ringgit is way too cheap and blame forces outside the country,........

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