He disagreed with currency experts who said the weakening ringgit was bad for the country, arguing instead that currency depreciation was not a bad thing.

He cited as an example the 1997 financial crisis when the Malaysian ringgit had dropped from RM2.50 to RM3.80 against the US dollar. The government then pegged it at RM3.80.

The depreciation of the ringgit saw the country recording a higher trade surplus, said Tan during a press conference here after he attended The Economic Times-Asian Business Leaders Conclave, a two-day event to promote business ties between India and Malaysia.

“When the ringgit was RM2.50 to US$1, we had a trade deficit. After it was pegged at RM3.80, Malaysia recorded a trade surplus.

“It means we had a lot of savings. No trade deficit. Deficit means we have to borrow. The country did very well when the country’s currency depreciated.

“So, even if the currency is down to RM4 plus (to US$1) now, it is good for exporters.

“Naturally, things are more expensive. We buy fewer expensive things. We spend less. We export more.

“We will have more savings in the country. We will have a trade surplus.”

He said those who would feel the pinch would be parents with children studying overseas. “They will have to spend more due to the exchange rate.”

Then prime minister Dr Mahathir Mohamad had made the decision to peg the ringgit during the 1997 Asian financial crisis.

He later admitted it was one of the most “dangerous ideas” he had ever implemented and one which had gone against common sense and accepted reason.

The Malaysian ringgit currently stands at RM4.44 to US$1.

Local economists have said the devaluation of the ringgit might have an impact on the automotive industry, airlines, and the power and telecommunication sectors.

Others have said a weakening currency could actually be a blessing in disguise in the long run as goods manufactured in Malaysia might seem cheaper and will make the country more competitive.