Government Blamed for Ringgit’s Plunge Dato Gan Yong Hwa：May Sparks Major Confidence Crisis

Ketua Sayap Bersekutu Puchong cum Ketua Biro Aduan Selangor Parti Pribumi Bersatu, Dato Gan Yong Hwa, believes that the unity government has failed to stabilize Malaysia’s ringgit exchange rate since taking office, leading to an embarrassing situation of continual depreciation with no signs of recovery. The government, he says, lacks a coherent strategy and instead resorts to a string of excuses, causing irresponsible misdirection.

He pointed out that Prime Minister and Finance Minister Anwar Ibrahim, who assumed the finance portfolio after the formation of the unity government, seems incapable of addressing the current situation, allowing the ringgit to plummet unchecked. Anwar’s recent attempt to evade responsibility by shifting blame onto the Governor of Bank Negara Malaysia further exacerbates the issue.

“Prime Minister and Finance Minister Anwar must confront this matter directly; blaming the central bank for the ringgit’s devaluation is unwarranted. With the ringgit-to-dollar exchange rate plummeting to 4.80, this is no minor issue!”

According to recent data, as of January, Malaysia’s foreign exchange reserves rebounded to $114 billion. Analysts suggest that this rebound may stem from an increase in foreign direct investment (FDI) and the expansion of Malaysia’s external debt. However, a closer look at Malaysia’s external debt situation reveals that the new government continues to accumulate new debts to repay old ones, leading to a continual rise in debt levels. Within a year of the new government’s focus on economic revitalization, Malaysia’s debt-to-GDP ratio has surged significantly, posing a substantial challenge in servicing interest payments.

He said that when Anwar held the position of Finance Minister, the people expressed dissatisfaction and questioned his ability to handle the role; however, people mistakenly believed Anwar possessed robust strategies, which is evidently not the case now.

“What the people are waiting for is not more excuses or explanations but substantive strategies, steps, and timelines for implementation, along with the actions the government will take to address the depreciation of the ringgit and salvage the national economy. People want to see concrete action from the government, not just rhetoric.”

He stated that if even the people are disappointed in the government, let alone foreign investors, who are undoubtedly alarmed by Malaysia’s current predicament.

“Anwar’s evasion of the issue and lack of direct response have raised serious doubts among the public about the government’s sincerity and measures to address the currency depreciation, constituting a significant confidence crisis. The issue of currency depreciation not only affects people’s livelihoods but also severely impacts the national economy.”

On another note, regarding the mandatory implementation of the E-invoicing system starting from August 1, 2024, Dato Gan Yong Hwa pointed out that the government’s rollout of the E-invoicing plan has sparked increasing public discontent. This plan, he argued, is ill-timed and raises questions about the government’s priorities.

“The government has been touting the E-invoicing plan as a means to enhance efficiency and reduce paper wastage, but the public widely believes that, amidst the current economic instability and rising cost of living, the government should focus on helping people navigate through tough times rather than introducing such burdensome plans.”

He emphasized that the government’s priority should be addressing inflation and improving living standards, rather than introducing an E-invoicing system that could potentially increase the burden and operational costs for businesses. This move appears more like a measure taken by the government to cope with fiscal constraints rather than to enhance people’s lives.

Therefore, he argued, the government should earnestly listen to the voices of the public, reassess its current policy priorities, and take practical and effective measures to address the real issues faced by the people. In these challenging times, the government needs to have a deeper understanding of the people’s needs and the challenges they face, rather than rolling out plans that could provoke further discontent.

As per the previous announcement, in the first phase, taxpayers with annual income or turnover of RM100 million and above will be required to implement the E-invoicing system from August 1, 2024. The second phase will commence on January 1, 2025, targeting taxpayers with annual income or turnover ranging from RM25 million to RM100 million, while the third phase will start on July 1, 2025, where all taxpayers must utilize E-invoicing .