SHAH ALAM - There is no cause for alarm over the weakening ringgit as this is not only happening in Malaysia.
Economist Emeritus Professor Dr Barjoyai Bardai said even a developed nation like Japan faced a similar scenario.
He said the impact of currency drop was unpredictable as it was also happening around the world.
To help strengthen the ringgit, he suggested consumers to purchase Malaysian-made goods.
"Malaysians do not have to panic over the ringgit drop because it is happening all over the world.
"For now avoid buying imported products, travelling overseas and spending in USD$ and focus on trading with countries with higher currency drop,” he told Sinar Daily.
He said this in response to the drop in ringgit to RM4.8 per USD$.
He said Malaysia will not turn into Sri Lanka or like other African countries as currencies were declining in every country at different rates.
"How much further the currency is going to drop depends on the market manipulation in the United States (US),” he said.
Due to the increase in the US Federal Reserve interest rate, he said Malaysia must similarly increase its interest rate.
"They did this to solve their internal problems as the US is also facing very bad inflation,” he said.
He added that when Bank Negara Malaysia (BNM) raised the interest rate, short-term investors believed that they were losing money and sold their shares, leading the ringgit to flow out of the country.
He said it would take about six months for things to be stable again and for now, economic analysts needed to have an open mind.
"We must monitor other foreign exchanges in addition to watching the US dollar.
"The Malaysian currency is experiencing a 12 per cent decline, but it is strengthening compared to the currencies of Japan, South Korea, Taiwan, Philippines, and in Europe,” he said.
However, he said the country should not turn a blind eye on the situation and must focus on other aspects such as exporting Malaysian goods abroad.
"Malaysia’s trade partner, China, is facing a higher drop than Malaysia, which is at 13 per cent.
"Therefore, trading with China will benefit Malaysia,” he said.