Mahathir says peg should be reviewed

PUTRAJAYA, Malaysia, Jan. 20 (UPI) -- Malaysia's currency peg against the weak U.S. dollar should be reviewed, former Prime Minister Mahathir Mohamad said Wednesday.

"I feel the time has come for us to review because we have lost a lot as the value of our currency has fallen," he said after meeting Joseph Stiglitz, an economics professor at Columbia University, Bernama reports.

Mahathir said while the depreciation of the greenback had little impact on Malaysia's imports from the United States, it was now costlier to buy products imported from Japan, Europe and elsewhere.

At the peak of the Asian financial crisis, Mahathir imposed selective capital controls and fixed the ringgit at 3.80 to the dollar as part of measures to stem the rapid outflow of speculative hedge funds from the country and to shield Malaysia from the vagaries of sharp currency fluctuations.

Asked by reporters to respond to Mahathir's remark, Prime Minister Abdullah Badawi said the currency peg would remain for the time being, but the Finance Ministry was monitoring the financial climate to determine if a change were needed.