FMT LETTER: From Kenneth Lee, via e-mail
Not many appear to have noticed the rapid appreciation of the ringgit against all the major currencies (US$, Pound, Singapore dollar, etc.). What has happened in Malaysia to warrant this rapid rise of 3% in the ringgit’s value? Has a large gold/diamond/platinum deposit been discovered. Or has a huge oil/gas deposit been found?
There is nothing in the media or the internet on this. Or have billions of dollars suddenly come into the country? Nothing, otherwise the BN government and its mass media, known to have the unique ability to make mountains of molehills, would have made this inflow the headline news for many days. So what is the reason for this recent rapid appreciation of the ringgit?
What is well-known is the outflow of US$200 billion from Malaysia. Malaysia has been reported recently to be just behind China for illegal outflow money. When such huge amounts leave a country, the currency of the country will weaken, unless there is surplus inflow as in the case of China.
The ringgit has been weakening for years and suddenly the reverse is happening. Is Malaysia so unique that it can defy fundamental macro-economic theories? Is this another Malaysia Bolih achievement ? Yes, it is another Malaysia Bolih achievement and at the core of it is Umno/BN’s dirty politics.
Most predictions about GE13 point to a Pakatan Rakyat win, in spite of all the dirty tricks by Umno/BN and unscrupulous actions of the corrupt EC. Looking at what Mahathir says and does, it is clear that even he feels that Umno/BN will lose GE13. If GE13 was a fair general election, Umno-BN would be decimated.
The corrupt Umno/BN politicians are very worried that the incoming Pakatan Rakyat government will go after them to recover the billions they have stolen from the Rakyat. They are therefore desperately moving their money out of the country to overseas destinations and they don’t have much time as April, the deadline for GE13, is just round the corner.
They need to convert the ringgit into US$, Pounds, Singapore Dollar, etc. for this purpose. It appears that Bank Negara, as the national money changer (note: ringgit is a non-convertible currency and hence only Bank Negara can officially convert ringgit into other currencies), is using the country’s foreign reserves to convert the millions and billions of ringgit of the Umno/BN crooks into foreign currencies and facilitating the transfer of these huge amounts of cash to overseas destinations.
In doing this, Bank Negara appears to be taking a leaf out of Mahathir’s dirty book (re: MAS shares bought by the Mahathir government from Tajudin at a much higher price than the market rate) and giving the Umno/BN crooks a substantially high exchange rate. By doing this, Bank Negara is killing 2 birds with one stone:
1) Enabling Umno/BN crooks to steal even more than they have actually stolen and stashed away; 2) Deplete the nation’s reserve of foreign currency so that the incoming Pakatan Rakyat government will inherit an empty coffer and will be faced with major financial and economic challenges; the ringgit will be forced to plummet and the new Pakatan Rakyat government will be blamed for this. Beware! Bank Negara is also ‘BN’.