December 24, 2002

Malaysia's Mahathir rebuffs IMF ringgit float view

KUALA LUMPUR - Malaysian Prime Minister Mahathir Mohamad today said any decision affecting the ringgit peg will not depend on input from the International Monetary Fund (IMF).
'That (flexibility issue) seems to be bothering the IMF. I think they should keep their opinions to themselves. They never help us anyway,' Dr Mahathir told reporters.
'If we had followed them, we'd be (lost) down the road... we can decide what and when we like to be flexible.'
Malaysia pegged the ringgit at 3.8 to the US dollar during the Asian economic crisis in 1998 to protect it from currency speculators, a move criticised at the time by the IMF, which said the rate should be determined by market forces.
The 77-year-old Mahathir was responding to questions after reports some IMF directors believe a carefully prepared move towards a more flexible regime would give Malaysia more options over the medium term and enable it to cope with future shocks and manage capital flow risks.
The central bank recently said the ringgit peg of 3.80 to the American dollar, fixed since September 1998, remained consistent with economic fundamentals despite weakening against major currencies in the January-October period.