Against USD, Malaysian Ringgit has depreciated from roughly 3.25 to 4.50 over a noticeably short time. And against our neighbour Singapore, it is 2.50 to 3.10. I get very tired each time I hear a politician or an economist talking about the advantages of a weak Ringgit. Recently, none other than Vincent Tan, one of the tycoons I used to admire, also sang praises on a weak Ringgit.
When our Ringgit strengthened, the same politicians would usually attribute it to their great economic management. Now, weak Ringgit is good for our exports, blah, blah, blah. Either way, they have a good reason to croak!
Of course, anyone who has a rudimentary knowledge of economics or finance knows the score. If your country exports more than it imports, and the products and services are priced in currencies that have appreciated against ours, or if they are now enjoying a bigger overseas demand by virtue of their quotations in Ringgit, obviously the country as a whole does benefit. Ditto the individual exporters - like tycoon Tan - themselves. But how much of these extra Ringgits generated does cascade down to those who toil and sweat for people like tycoon Tan? Or from the country's Treasury?
On the other hand, the Tom, Dick, and Harry (or in our contest, the Ali, Ah Hock and Muthu) have to dig deeper into their pockets to pay for everyday necessities, not to mention the bigger ticket items, most of which have to be imported, or their children's education abroad. Everyday necessities impact our lives most. Prices seem to creep up silently and endlessly. Yet, have these wage earners' salaries been adjusted upwards to reflect the reality even if they are working for people like tycoon Tan?
Weak currencies generally lower standard of living all round. People cut back spending even if they are financially quite adequate.
Currency depreciation, especially in a precipitated pace, is a sure sign that things are not right in a country. Please pull your socks up, Mr Politician! And to Mr Economist, save your academic rhetoric to less discerning students! And to Mr Tycoon, keep your mouth shut and enjoy the windfall!