LETTER | Recently, the focal point of discussions has revolved around the precipitous decline of the ringgit, a matter that has gripped the attention of the entire nation.

Many have expressed their concerns about our future economy when the ringgit continues to plunge to the extent it reaches RM5.00 against the US dollar.

Therefore, the government must take prompt action to put a lid on the depreciation. The Malaysian currency, once steadfastly below RM4.00 against the US dollar, has experienced a fluctuation that has seen it surpass this threshold.

The genesis of the ringgit’s weakness can be traced back to 2015, and various perspectives have emerged on the most effective strategies to address this economic challenge.

Some people think boosting the Overnight Policy Rate (OPR) can help stop the ringgit from dropping. Others say it doesn’t matter if the OPR is high or low; what’s more important is attracting more foreign investments.

It is posited that attracting foreign capital hinges not solely on interest rates but on a multifaceted array of factors, such as political stability, low corruption levels, and more.

Central to any efforts to bolster the ringgit is the recognition that fluctuations are primarily influenced by changes in demand and supply within the foreign exchange market.

A surge in demand, a decrease in supply, or a combination of both can contribute to the strengthening of the Malaysian currency. Consequently, strategies aimed at enhancing the ringgit should strategically manipulate these factors.

In exploring alternative avenues, one particularly noteworthy and potentially impactful strategy involves the revitalisation of the tourism industry.

By strategically fostering growth in this sector, it can act as a magnet attracting more foreign tourists to our country. Thus, a higher demand for ringgit ensues.

Recognising the potential of tourism as an economic catalyst, the government must consider and invest in initiatives aimed at boosting this industry.

In doing so, not only can we anticipate positive changes in the demand for our currency but also contribute to the overall resilience of our economic landscape.

The views expressed here are those of the author/contributor and do not necessarily represent the views of Malaysiakini.