Although Bank Negara has had gave numerous assurance, the values of ringgit continues to diminish. The direct impact of weak ringgit will be on the imported food. Many fathom that the reason of the declining values was due to unimpressive government finances as manifested by prolonged budget deficits and rising national debts.
As the former Finance Minister, Tengku Razaleigh Hamzah points out that the federal government deficit has been sustained borrowings that are now reaching close to statutory debt ceiling of 55% of Gross Domestic Product (GDP). In January 2012, the ringgit against dollar was RM3.15 and in August 2013, it climbs to RM3.30.
If we compare the ringgit with Singapore dollar, the ringgit had fallen to a 15 years low at RM2.5479. Instead of drumming a constant assurance, the Bank Negara should acknowledge the setback and chart the next course of action to cater for the critical deficit. The government can not rely heavily on subsidy reduction to close the wide deficit gap. They should devised an ingenious way to increase revenues couple with greater effort against corruption and wastage.
