PM to announce measures to strengthen the economy today

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KUALA LUMPUR: Prime Minister Datuk Seri Najib Tun Razak is expected to announcemeasures to strengthen the economy today as falling commodity prices weigh on growth and the ringgit plumbs near 18-year lows.

Najib is expected to announce the new measures after a weekly meeting of the economic council, officials at the Prime Minister’s office said on Saturday, without giving details.

Last month, he set up a special economic committee to propose immediate and medium-term measures to strengthen the economy and to restore investor confidence.

Malaysia has been gripped by political tensions which escalated in early July after a report that investigators looking into debt-laden state investment fund 1MDB had found that close to US$700mil had been deposited in an account held by Najib.

Najib, who also chairs 1MDB, has denied any wrongdoing, but the scandal has not died and has weighed on the economy.

Both Najib and Malaysia’s central bank governor Tan Sri Dr Zeti Akhtar Aziz have pledged not to impose capital controls.

The Prime Minister has maintained that Malaysia’s current economic situation was stronger than during the 1997-98 Asian financial crisis.

Massive outflows of capital during that crisis forced Malaysia to peg the ringgit at 3.8 to the dollar, which was retained till 2005.

Fitch Ratings said last week that Malaysia’s deteriorating currency position – reflected in the ringgit’s sharp depreciation, falling foreign exchange reserves and shrinking current account surplus – could force it restore a negative outlook on the country’s credit rating. – Reuters

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