Najib blames RM decline on US Fed action, sale of Malaysian bonds


KUALA LUMPUR: Prime Minister Najib Razak says the main reasons for the ringgit’s slide are the rise in US dollar interest rates and the sale of Malaysian bonds held by non-residents.

Najib, who is also finance minister, said this had caused uncertainties to the ringgit.

“A total of 34% of the bond-holding market is held by non-residents. There is good and bad to this,” Najib said during question time in the Dewan Rakyat today.

He was answering Dr Tan Seng Giaw (DAP-Kepong) who had asked him to state the main reasons for the ringgit’s depreciation.

“Portfolio rebalancing has led to the depreciation of the ringgit,” Najib said, adding that the slump was felt not only in Malaysia but in the region as well.

Uncertainties in oil prices had also contributed to the decline, he said.

He then listed several measures to curb the effects of the ringgit’s depreciation.

“In the short term, we will ensure the reserves are maintained, with a total of US$95 billion as a buffer,” he said, adding that at end-2016, Bank Negara Malaysia had stopped Malaysian companies from taking part in non-deliverables to halt speculation.

He said the government was also encouraging companies to convert the ringgit as it would help to liquidate the currency.

The Pekan MP also urged people to stop spreading news that might affect the Malaysian economy.

“I appeal to you against doing so since we almost lost RM31 billion from the Aramco deal.

“We explained the true facts to the Arabs and thankfully they accepted. Our economy received an A- rating from international rating agencies,” he said.