We have heard enough from the powers-that-be as to why the ringgit peg is to remain as it is at the present level. Almost all of the reasons given relate to protecting the immediate interests of the business community, particularly the exporters.

This sector appears to be getting all the attention at the expense of other substantive concerns which in turn result in distortions in the allocation of resources, the discouraging of import of new technologies and expertise and the constraining of the purchasing power of the man in the street.

The position has always been very clear. We certainly need a stable and sustainable foreign exchange rate after taking into consideration the currencies of our major trading partners and that of our major competitors in the export market

Notwithstanding this, we must not lose sight of the fact that we are not competing in the international market based on exchange rates alone. Equally important is our competitiveness and this relates to quality, productivity improvement and branding.

A prolonged period of undervaluation of our currency will result in local exporters becoming complacent and putting enough effort and resources into their product research and development (R&D). This is already a syndrome among some Malaysian exporters.

In the midst of all this, the average Malaysian has been made to suffer all along. The easy money policy with low interest rates means lower earnings for their savings and the losing of money on their investments in unit trusts many of which are still at about 65% below issue price.

Many have withdrawn their Employees Provident Fund (EPF) savings to invest in these unit trusts. Dividends from both EPF and the Tabung Haji pilgrimage fund have been at all time low for the past five years.

In addition, the impact of the recent increase in the price of petroleum has resulted in consumers' purchasing power further shrinking. Even those in the East Cost states, like Kelantan and Terengganu, which normally quite sheltered from inflation, are now feeling the pinch as the prices of essential goods spiral upwards.

For the economy as a whole, the persistent undervaluing of the ringgit has resulted in a prolonged distortion in the allocation of resources and the distribution of real income with all of their consequences. This in turn will keep the foreign direct investments (FDIs) away and only attract short-term speculative money.

We appreciate that any decision to repeg the ringgit or migrate to a new foreign exchange mechanism is something that has to be done prudently. It must essentially benefit us as a nation and not reward currency speculators and hedge funds.

Considering that, the US dollar is already at 1.34 against the Euro, a review the ringgit peg should not be delayed for too long. be made to be too far away.

I am of the view that a re-peg of the ringgit from its present RM3.80 to either RM3.40 or RM3.50 against the US dollar would be sufficient to redress the decreasing purchasing power of the man in the street whilst taking into consideration our country's open economy. The move will at the same time help stimulate domestic trade.

Too long a delay may result in a traumatic reversal in the bond and equities markets as speculators unwind their positions. If the timing is bad, the ensuing market corrections would be very severe.

The best time to re-peg would probably be when local fund managers and investors are ready to go into the market to establish new support levels. This probably would be after the Chinese New Year, perhaps sometime in February.

Notwithstanding this, the equities market being what it is appears to be, is already discounting this event with foreigners increasingly becoming net sellers. We hope that unit trust fund managers have already done enough profit taking to enable them to declare decent dividends for their investors.