No reason to peg ringgit as 1MDB is the problem, says Rafizi

PKR's Rafizi Ramli today said there was no ‎necessity to peg the ringgit to another currency despite its downward trend as the problem lay closer to home with troubled state investor 1Malaysia Development Bhd (1MDB). He said a currency was pegged to stabilise it because of global volatility and factors that could not be controlled, but this time, the ringgit was in trouble because of the alleged scandals involving 1MDB, which is owned by the Finance Ministry and has borrowings supported by government guarantees. "I am in agreement with (‎Bank Negara governor) Tan Sri Zeti Akhtar Aziz that there is no necessity to peg the ringgit," Rafizi, the PKR secretary-general, told a press conference in Petaling Jaya today. "You peg the ringgit because of global volatility and because of things outside your control, so you want to provide stability to the currency. "But ‎our currency's problem is not because of the global volatility or fundamental problems. It is because of 1MDB," he said. The ringgit lost 16% of its value against the dollar this year, making it Asia's worst-performing currency. According to Bloomberg, the currency weakened 1.1% to 4.1765 a dollar yesterday. Zeti has repeatedly said that the central bank has no intention of pegging the ringgit to another currency. She said that leaving the ringgit to adjust itself would allow the economy to remain more stable. The BNM governor also said the ringgit was expected to start recovering once issues surrounding the controversial 1MDB are resolved. The debt-ridden state fund is ‎the subject of multiple investigations amid allegations of financial mismanagement and graft. Prime Minister Datuk Seri Najib Razak, who also chairs the fund's advisory board, has resisted calls to step down from government. Rafizi today repeated that the cause of the ringgit's poor performance was 1MDB and Najib. "The problem is 1MDB and Datuk Seri Najib. ‎So why do we need to drag the whole economy to something that has its own pros and cons when the easiest solution is to resolve 1MDB and Najib? "‎That's why I agree with BNM that we don't need to peg the currency but we need to 'peg' Datuk Seri Najib." – October 13, 2015.