Malaysia not to revise currency peg<\/p>\n
Associated Press, Kuala Lumpur<\/p>\n
Malaysia will not revise the ringgit's peg to the U.S. dollar \"in
\nthe near future\" because it is not undervalued compared to other
\nAsian currencies, the government said on Thursday.<\/p>\n
Deputy Prime Minister Najib Razak said the peg provided
\nstability and competitiveness for Malaysian exports.<\/p>\n
\"Our current assessment is that the ringgit is not
\nsignificantly undervalued compared to a range of regional
\ncurrencies,\" he said in a speech at a conference on Malaysia's
\neconomic outlook.<\/p>\n
\"Given an expected slowdown in the world's economy and
\nweakening export environment, the government believes the peg
\ncontinues to provide much-needed predictability and
\ncompetitiveness for Malaysian exports,\" he added.<\/p>\n
Najib's remarks were among the strongest so far from
\ngovernment officials on the peg, even as speculators continue to
\nbet on a ringgit rise by raising their exposure to Malaysian
\nequities and debt.<\/p>\n
Former leader Mahathir Mohamad, who introduced the 3.80
\nringgit-to-a-dollar peg six years ago, suggested in January that
\nthe policy should be reviewed because the weak dollar has made
\nimports expensive.<\/p>\n
While the peg helped stabilize the economy during the 1997-
\n1998 Asian financial crisis, the ringgit has depreciated against
\nmost major currencies with the fall in the dollar's value in
\nrecent months.<\/p>\n
In the last year, the ringgit dropped by 4.1 percent against
\nthe euro, 5.1 percent against the British pound and 3.2 percent
\nagainst the yen.<\/p>\n
There has been broad speculation in the market in recent
\nmonths that Malaysia will let the ringgit strengthen this year,
\nas some economists have recommended, given the country's strong
\neconomic position and expectations for continued growth.<\/p>\n
Gross domestic product growth is expected to have reached 7
\npercent in 2004, to be followed by an estimated 6 percent this
\nyear, the government has said. Many economists say a fair value
\nfor the ringgit is now between 3.30 and 3.50 to a dollar.<\/p>",
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