Deputy Prime Minister and newly appointed Finance Minister Najib Abdul Razak today denied the government was considering a move to re-peg the ringgit.
MCPXNajib, who took over the finance portfolio from Prime Minister Abdullah Ahmad Badawi last week, also said the cabinet had yet to decide on whether to further reduce the petrol price.
The government had last month reduced pump prices by 15 cents RM2.55 or 5.6 percent in a bid to appease the public, unhappy with an earlier decision in June that saw fuel prices hiked by as much as 70 cents.
Najib said the government was committed to allowing the market to determine the value of the ringgit.
Speculation about an impending re-peg had swirled after former prime minister Dr Mahathir Mohamad called on the government to reintrodue the mechanism over the weekend.
Mahathir, also a former finance minister, had argued a peg would lessen the effect of the global slowdown on the local currency, which has lost more than 5 percent in value since the start of this year.
The outspoken 82-year old had together with Second Finance Minister Nor Mohamed Yakcop orchestrated the overnight banning of overseas trading in both local shares and the ringgit during the Asian financial crisis in a bid to stop capital flight from the country.
The ringgit was fixed at RM3.80 to the US dollar on Sept 1, 1998. Unpopular with investors, the peg was finally scrapped on July 21, 2005 and the ringgit is now on a managed float against a basket of currencies.
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