Prime Minister Tun Dr Mahathir Mohamad has said that Putrajaya may consider changing the country’s currency or going cashless in order to combat corruption.
In an interview with Channel NewsAsia, the former finance minister also ruled out any need to peg the ringgit, as his administration had done with the US dollar in response to the 1998 Asian Financial Crisis.
“We are studying how best to reduce corruption, certainly, and how best to keep track of money that is being spent, especially by the government,” he was quoted as saying.
“At the moment, there is no need [to peg the ringgit]. But we will have to study that also. That is one of the options that we have.”
Dr Mahathir also suggested replacing currencies, but warned that it is a decision that can only be made after careful deliberation.
“It’s not an easy thing because when you want to replace currency, you must know how much currency is in circulation because we have to replace what is in circulation and that is a very big amount,” he reportedly said.
“If you were to replace, you need to print huge amounts of paper money… but that is not a decision that one makes lightly. You have to study the effect on the economy.”
The ringgit currently comes in denominations of RM1, RM5, RM10, RM20 and RM100. As at this morning, the ringgit was trading at RM4 against the US dollar.
In late 2016, India embarked on a surprise currency control, withdrawing the two largest denomination notes from circulation in a shock move designed to tackle widespread corruption and tax evasion.
The decision caused chaos among its citizens as banks struggled to dispense new notes, but also gave the electronic cash industry a boost.