It is good news that the government finally unpeg the ringgit to the greenback. Never mind what finance minister, the central bank's governor and the prime minister had all previously said about the peg being beneficial for the country.

But given the situation, Bank Negara Malaysia (BNM) had no choice but to remove the peg as to leave after China's move to de-peg would mean leaving the ringgit open to speculation. Huge amounts of speculative money would flow into the country to make a quick profit.

It's good to see that BNM is prepared to swallow its own words for the benefit of the country. Let's be frank, Malaysia is just a small economy - a small fry among the big and powerful whales and sharks.

We have to find our own niche and improvise to prosper. We cannot dictate to others our own terms (unless we have an all important commodity that others are begging for at our doorstep).

A floating ringgit - even if a 'dirty float' - is the first step toward finding our competitive edge. The next step is to improve our government, administration and the cost of doing business in our country. Efficiency is the key to our future success.

This means that corrupt practices, unfair advantages to certain groups and anything that contribute to an economic slide is not good for the country. Let's have fair rules for all and treat everyone equally.

If you start giving special treatment to certain groups of people in the country, then sooner or later some other groups will claim they are more deserving. There is no end to it.

Looking at the fundamentals, I would expect that the US dollar to continue to strengthen in the short term. US interest rates increased a week ago, attracting foreign funds for the high yield and safety features of the US dollar.

The ringgit, being a petro dollar to some extent, is expected to rise faster than the US dollar. (This is only true if BNM does not print money faster than the market can absorb).

Why do I say that the outlook for US dollar is good in the near term? Well, where else could you invest in companies that are world class and relatively cheap? The market in the US is the most transparent in the world, with a good judicial system with everyone being treated equally.

Another thing to take into account is that Asian governments haven't been weaned off their dependence on exports to solve their income and employment problems at home. They need the US market more than ever, so they will keep on exporting to the US and spend their surplus US dollars on US Treasury Bills.

Until someone can show them that there is a more profitable investment somewhere else - like investing in their citizens' standard of living for instance.

With this unpegging, BNM can now concentrate on other worthwhile targets, eg inflation, income and employment. I believe that inflation is foremost on the BNM's agenda at the moment, given the previous seven-year agenda of increasing income and employment.

What can we expect? In my view, the interest rate would increase in the near term in tandem with US interest rate. This would reduce the inflationary expectation and curb spectacular moves by banks to increase market share by introducing juicy incentives (like Commerce Assets Holding Bhd's recent incentive of 25 basis point below BLR for home lending).