KUALA LUMPUR, Oct 1 — DAP chairman Lim Guan Eng today accused the federal government of being indifferent to the financial burdens of Malaysians by playing down the effects of the ringgit against the US dollar and the currencies of the nation’s other major trade partners.
The former finance minister warned that the decline is not temporary as it will be reflected in an increase to the country’s service trade deficit and food expenditure as 80 per cent of Malaysia’s imports and exports are invoiced in the US dollar.
“Malaysia’s services trade recorded the highest deficit ever of RM60.7 billion in 2021. The weak ringgit will definitely have an impact on sharpening the services trade deficit this year.
“Bear in mind that our food import bill amounted to RM63 billion last year and the ringgit’s 24 year old low against the US dollar is definitely a big deal with a negative impact on food prices paid by the rakyat,” he said in a statement.
The Bagan MP calculated the ringgit has devalued by more than 11 per cent against the US dollar since January, adding that the declines against the Indonesian rupiah is now more than 4 per cent and has fallen to an all-time low of RM3.26 against the Singapore dollar.
Lim accused the Umno leaders in government of prioriting party interests above the public wellbeing and the country’s economy with their repeated push for a general election to be held this year.
He said Umno missed its chance to prove it cared for Malaysians by keeping minister Tan Sri Annuar Musa despite what he called the latter’s failure to control inflation as chairman of the Special Cabinet Task Force on Jihad Against Inflation.
Lim noted that the Consumer Price Index and food inflation stood at 3.4 per cent and 6.1 per cent respectively in June when Annuar was appointed the chairman and rose to 4.7 per cent and 7,2 per cent respectively in two months.
He also blamed Annuar for Bank Negara’s decision to raise the Overnight Policy Rate by 25 basis points to 2.5 per cent, claiming that borrowers will have to pay higher costs as a result.
“At the very least Umno should have demanded that either Annuar resign or request that the Prime Minister Ismail Sabri take over as Chairman,” he said.
Lim predicted that the “worst” is yet to come.
“Bank Negara has no confidence in Annuar’s ability to fight inflation and is expected to increase the OPR in their next two meetings in November this year and January next year to at least 3 per cent or higher.
“Does Umno care that the people have to pay more?” he asked.