Ringgit peg 'good for business'

Ringgit peg 'good for business'

KUALA LUMPUR (AFP): A British minister Tuesday praised Malaysia's once-controversial currency peg, saying it had helped stabilize the economy and attract foreign investment.

"Clearly it has been helpful to stabilizing the economy, which has now got sustainable growth," Trade Minister Richard Caborn said.

"Stability is very important if you want to attract foreign direct investment or to do business with a country. Uncertainty is a very expensive commodity," he told a press conference.

"If it (the peg) brings certainty, as it has done, then obviously it must be a good thing."

Malaysia in September 1998 imposed selective capital controls and pegged its ringgit at 3.80 to the dollar to beat currency speculators.

The controls and the peg were initially criticized internationally but later won greater support.

Caborn was speaking at the end of a two-day visit. He goes on to Singapore and Indonesia.

Addressing local and British business leaders earlier, the trade minister praised Malaysia for the "pragmatic and purposeful way" it addressed the East Asian economic crisis of 1997/98.

"Their approach, strongly criticized from some quarters, is now recognized by the business community as having been a very credible response," he said.

Caborn also launched a scholarship program for next year.

The program, funded by the British government, has helped 848 Malaysian students to study at British universities since 1984.