While acknowledging that external factors influenced the ringgit’s decline, World Bank economist Apurva Sanghi pointed to the 1MDB scandal and Malaysia’s lack of competitiveness as the root of the problem.

The bank’s lead economist for Malaysia said while other Asian countries hit by the 1997 Asian Financial Crisis (AFC) have introduced significant reforms, Malaysia’s lack of reform has hurt its economy in the long run.

“Malaysia’s ringgit began stronger than Thai’s Baht and...