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.