THE ringgit had remained shackled to the US dollar since September 1998 in the aftermath of the Asian financial crisis of 1997/98. It was often argued that the currency peg had outlived its usefulness. Finally, Malaysia plucked the courage and de-pegged the ringgit on July 21, immediately after China abandoned its own currency peg.
Nothing much has happened to exchange rates since then, quite contrary to market expectations. Bank Negara has now in place what is termed a “basket peg,” which means the ringgit is now tied to a basket of currencies. In fact, the central bank has reverted to time-tested practices.