Gov should have a goal to achieve balance in monetary and fiscal policies, say experts
06 Jan 2023 04:28pm
Photo for illustrative purposes. - File Pix.
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Economist Professor Emeritus Barjoyai Bardai said each step taken should place priority on the people's future.
"We must have a specific goal, for example, in 2023 what is the exchange rate we want to achieve?
"Do we want the ringgit to achieve RM4 to $US1? We want to know how much reserve we would get from trade, we want to try to increase exports and reduce imports by using import substitutions, and so forth.
"We want to ensure the government has a balanced budget, reduce the deficit in the budget within three years, and at the same time we want to ensure prosperity for the people.
"This is the real purpose, what we are doing is intermediary, the important matter is that the people must ultimately be prosperous and that their welfare is better preserved in the future," he said at the New Government Watch programme on Friday.
As the guest speaker of the pogramme, he said the people should not feel pressured by the increase in the overnight policy rate (OPR) because Bank Negara Malaysia (BNM) already has a consistent policy.
The public needs a simpler explanation of this situation so that they will know what is happening.
Barjoyai said Prime Minister Datuk Seri Anwar Ibrahim's experience as finance minister for the past seven years has given him an advantage in planning a holistic budget without sacrificing any interests.
"Anwar is an experienced person on the management field because he was the finance minister for seven years, If he thinks there were several instruments chosen by BNM that can either accelerate the effect of reducing inflation or the effect of optional instruments compared to increasing the OPR, other instruments could be used to limit loans or credit issuance by commercial banks.
"BNM has a role because they keep the cash reserves and they control the exchange rate, this was an important component in ensuring the inflation rate we felt this year because we are importing a lot of food, over RM65 billion of imports were food, if we can control the exchange rate to improve, we could reduce the effects of inflation," he said.
Anwar said in a press conference that BNM has the rights and authority to make decisions related to the OPR without the need for government intervention to ensure economic stability.
--AWANI
