Economy can crash without capital controls, says DAP

By Syed Jaymal Zahiid

KUALA LUMPUR: Malaysia's economy is set to crash if no regulation is imposed on the inflows of hot money, DAP economist Charles Santiago said.

A rallying market and appreciation of the ringgit have forced the government to think twice before imposing capital control.

Second Finance Minister Ahmad Husni Hanadzlah has said in an interview with Bloomberg recently that “we are benefiting from the capital inflows and the appreciation of the ringgit. It’s not affecting our property market like many other countries.”

The World Bank has warned that Asian economies may need to impose capital controls as “quantitative easing by the US threatens to spur asset bubbles in the region”.