“As the ringgit weakens, maybe it’s time to get out of the capitalist global system”

[superadmin]

THE ringgit has fallen to its lowest value since the 1997 Asian financial crisis.

The reaction from the opposition, in rage against Finance Minister Datuk Seri Tengku Zafrul Abdul Aziz, has been one of frustration and panic.

The reciprocation from the Finance Ministry has been to alleviate their fears, stating that the external influence of Malaysia’s main export partners has contributed to its slide.

To Tengku Zafrul’s credit, there is some proof of this, with many currencies globally depreciating against the US dollar. However, the ringgit has also slipped against the Singaporean dollar, Japanese yen and euro.

What does this mean?

The relative value of one currency against another impacts the imports of said currency’s country. As a result, more ringgits are needed to match the value of imported goods which are sold in the market for higher prices to make up for the difference. This is what we call inflation.

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