The government and the Bank of Japan have intervened in the currency market to buy yen and sell dollars for the first time in 24 years in order to put the brakes on the yen's sharp decline.weakened to nearly ¥146 to the dollar on Sept 22,
Monetary policy differences between Japan and the United States are expected to remain unchanged for the present. Other central banks, including the European Central Bank, are also raising interest rates across the board. In addition, given that Malaysia has very high net food imports, the food costs for many in Malaysia are expected to rise and run amok. Malaysia's unbridled politicking is not helping the ringgit situation either, on the contrary, opening it fundamentally to the levels never seen in Malaysia's history for more than 24 years.
However, given the specifics of the current global and local situation, interest rate hikes can do very little in helping to fight either inflation or ringgit depreciation. The inflation, much of which stems from energy and other supply shocks, would not be resolved by tightening the money supply.