Malaysia says will not peg ringgit to dollar

“I really hope the younger generation do not engage in the spreading of such news that seem to propogate that Malaysia is being derailed economically and politically, and on the path to becoming a rogue nation and a failed state”, said Najib.

“I specifically say regulate, not restrict – so that none should have to suffer being criminally defamed… and so that the Internet does not become an ungoverned space dominated by insults and untruths”, he said when delivering his speech on “Leadership in challenging times” at the 25th Tunku Abdul Rahman lecture, organised by Malaysian Institute of Management in Kuala Lumpur tonight.

“The flexibility of our exchange rate is thus important to absorb these global adjustments and volatility”.

Najib’s comments mirrored remarks made by Bank Negara Malaysia governor Zeti Akhtar Aziz.

During an engagement session with economists and analysts yesterday, he said they believed the ringgit should be higher than its current level against the US dollar based on the country’s economic fundamentals.

“In him, I found a steadfast partner – a man who exemplified honour, dedication and devotion to his country”, he said.

Najib said that he and Hashim believed that national security was related to regional and worldwide security and that it was in Malaysia’s best interest to expand its outlook and experience. “People want to see what we are going to do in the short term and there will be a reaction to that”.

Malaysia will not impose capital controls or peg the ringgit to the US dollar – putting to rest speculation that the country would revert to the policy measures taken in 1998 to stem the currency’s slide. Only towards the end of 2005 was the peg lifted and capital controls gradually eased.

Meanwhile, the Malaysian economy has suffered from weak global commodity prices and falling domestic consumption.

Last month, Najib sacked his deputy in a cabinet reshuffle, removing ministers critical of his involvement with the state fund which ran up debts of more than $11 billion. Najib sits as the chair of its advisory board.

Najib has suspended a parliamentary committee looking into 1MDB’s accounts, replaced the attorney-general and several MACC and central bank officials who were suspected of leaking investigation information were questioned by police.

A rally planned for next week calling for Najib’s resignation is expected to draw thousands despite being officially barred by authorities.

His crackdown on criticism has extended to traditional and online media, angering pro-democracy activists.