Anwar said while the value of the ringgit is declining at the moment, it is not the only currency facing such a situation. He cited the decline in the value of the yen and the renminbi.
His statement on the OPR comes as Bank Negara Malaysia (BNM) is set to have its last Monetary Policy Committee meeting for 2023 tomorrow and on Thursday.
Anwar also told the Dewan Rakyat de-dollarisation is the solution Malaysia needs to adopt as the US Federal Reserve increases its interest rates.
“Last month, the interest rate went up by 5.5% in the US, but we did not increase our OPR,” said Anwar, who is also the finance minister.
“There are views among economists that in order to strengthen the ringgit, we have to increase the OPR, but we need reasons to justify it.
“Is it because of inflation? But inflation has gone down. Is it because of unemployment? But unemployment has gone down. Is it because we can’t bring investments? But investments have increased (in our country).”
He said OPR hikes would affect the country’s small businesses and, therefore, it would only be carried out when the national economy is in decline.
“We don’t see a need (for a hike) at the moment,” he said.
In May, BNM raised the OPR by 25 basis points to 3%.
Commenting further on de-dollarisation, Anwar said while its implementation is not easy, it is also not impossible.
“For example, with China, our largest trade partner with US$1 trillion (RM4.76 trillion) in trade value, 25% of the trade involves ringgit and renminbi, while it is 18% with Indonesia and 18% with Thailand.
“These are just three countries (so far). We have discussed starting de-dollarisation with Arab countries. However, we have scored a huge success with the three countries (China, Indonesia and Thailand) as a long-term measure to strengthen the ringgit,” he said.
Work with Middle East companies to penetrate new African markets
Separately, on penetrating new export markets, Anwar said Malaysia has achieved some success in the Latin American continent.
He said while Africa has potential, familiarity with the region is limited to certain countries. Therefore, Malaysia will utilise countries familiar with the continent such as Egypt, Saudi Arabia and the United Arab Emirates.
“That (would) be our strategy to ease (our new market expansion efforts), because a lot of companies in the Middle East are familiar with carrying out business over there (Africa).
“I have suggested that we increase our collaboration (with these Middle Eastern companies) and it seems that there are a few (local) commodity-based companies familiar with networking there,” he said.