Incorrect as I bot 3.8090 n 3.8125 via Banks today

Sectors | Mon Jul 27, 2015 10:00pm BST

Keeping calm: Malaysia lets ringgit fall below 1998-2005 peg
GRAPHIC: Ringgit, reserves: link.reuters.com/byg35w

By Emily Chow and Yantoultra Ngui KUALA LUMPUR, July 28 (Reuters) - For the past three weeks, Malaysian authorities have allowed the ringgit to trade below levels that in 1998 prompted them to impose a dollar peg and capital controls. Economists expect more downside, with the Federal Reserve set to raise U.S. interest rates.

The ringgit has traded around 3.81 per dollar since July 6, exceeding the 3.80 level of the peg set by the government between 1998 and 2005. Economists warn against intervention to shore up the ringgit, as Malaysia's international reserves have already dropped to near five-year lows of $100.5 billion, data released by the central bank last week shows. While that is sufficient to fund 7.9 months of retained imports, it is just 1.1 times short-term external debt.

The ringgit has fallen against the dollar since the third quarter of last year as weak energy prices threaten Malaysia's oil-and-gas revenues. Political uncertainty arising from the investigations surrounding debt-laden state fund 1Malaysia Development Bhd has further hurt sentiment. Foreign investors were net sellers of shares on the Malaysian bourse for 13 weeks until July 24.

The central bank's governor said in January - when the ringgit was around 3.550 per dollar - that the authority had "moved on" from using controls to manage capital flows. The ringgit has declined 5.1 percent since then. A U.S. interest rate hike this year would spur further capital outflows from emerging markets such as Malaysia, pressuring the currency.

"You can try to stabilise the ringgit, but ultimately I don't think it can stand the correction," said Chua Hak Bin, Singapore-based head of emerging Asia economics at Bank of America Merrill Lynch. "The ringgit will have to adjust to whatever new equilibrium... we are forecasting the ringgit to weaken to 3.86 by end-2015 and 4.05 by end-2016 against the dollar." (Editing by Ryan Woo)
http://uk.reuters.com/article/2015/07/27/m...N1042T820150727

3.82356  

Zeti has given up ?

Bank Negara grips ringgit tightly as troubles mount

Protecting the ringgit from political fallout may end up costing Malaysia more than any bailout for the debt-ridden 1MDB state fund, given the rate at which the central bank has been using its reserves in recent weeks.
http://www.malaysiakini.com/news/306780

Bank Negara stemming the decline of the ringgit
http://www.thestar.com.my/Business/Busines...line/?style=biz

How long can Zeti hold on?

Managed to bot some USD today @ 3.8185

My conclusion is that Malaysia will go through a mild recession over the coming years. However, there won't be a major crash in the stock market or house price as predicted by some. Let's just be optimistic about the economy and MYR value. Remember, US creates one of the biggest financial crisis in the world when nobody is expecting it to come. Now that everybody is expecting Malaysia's to slump, how likely is it to happen?

1. Fiscal deficit - during that time, Malaysia actually had budget surplus, instead of deficit currently.
2. As a result fiscal debt continously, Gov debt is at elevated level as compared, now is about 54% of GDP.
From 1990 to 1998, Gov debt was steady across around 100B
From 1998 to 2008, debt grew to around 200~300B
Now, about 500B.
So there is need to rectify the fiscal deficit situation.

From what I see, most average Malaysians have no way to hedge against this situation. Most average people already struggle with low salaries, inflation caused by GST & try making ends meet; let alone thinking of opening foreign currency account in overseas.

Can, rm hold well at rm4-4.50 when this happens

I started reading this forum. What amused me is that Malaysia don't have anything thing to peg USD at 3.80 considering oil revenue was drastically reduced. Nothing to peg

It is not about a chance, but must pare down the deficit situation, if not, Greece is the classic lesson to be learned that why need to pare down the deficit situation fast.

With GST collection is expected to beyond expectation, fiscal deficit should go down further but it needs to couple with prudent spending for the future as well.

I went to buy some USD at this penggurup in Tesco Cheras for my Sept oversea trip.

My rate was 3.84 and the LCD screen changed to 3.85 while we were still counting money. Luckily the penggurup still honor the "old" rate of 3.84

Apa suddaaa jadi dgn Malaysia aku pun dah pening.

GBP 6.0225
US$ 3.85098
€ 4.22710

No more defense. Because BNM bullet finish ?

Malaysia’s ringgit takes a wild ride
Malaysia's currency, already under pressure from a political scandal and the oil price drop, really fell out of bed Monday, with the ringgit falling nearly 1 percent.
The central bank, Bank Negara Malaysia (BNM), has been intervening in the market to support the currency, but analysts said those efforts may be stumbling.
"(The central bank) can't hold the level of the currency where it is, given that their reserves have been declining. Now maybe they're starting to throw the towel," Khoon Goh, senior foreign-exchange strategist at ANZ, told CNBC Monday, noting he hadn't expected the currency to hit the 3.85-handle until next year.
http://www.cnbc.com/2015/08/03/malaysias-r...-wild-ride.html

Finally, Malaysia's June foreign trade report Wednesday could draw some attention after data last week showed the county's foreign exchange reserves fell to a five-year low and in danger of sliding below the psychological $100 billion level.

Moody's Analytics expects the trade surplus narrowed to 4.5 billion ringgit (around $1.18 billion), from 5.5 billion ringgit the previous month, given continued declines in energy prices. Malaysia is a net energy-exporting economy. With the ringgit trading at seventeen-year lows, that's also putting upward pressure on its import bill, the firm added.
http://www.cnbc.com/2015/08/02/week-ahead-...-will-ease.html

Yeah,.. haha,.. thet's my observation too,...I wonder why peg against the SGD ? Isnt the USD more threatening against the RM ??? Trying to peg this and that and running out of bullets,.... Next : when report of foreign reserves are out, and percentage of Debt to GDP is out, the ratings agencies will downgrade Msia. Afrer this, RM will drop further, making the snowball effect ! THEN : nobody wants to sell food to Msia anymore. That's the finale,... and you and I will finally FEEL IT.

There is no single good news on RM.

MYR will goes wild in the event there r minor changes to the senior management @ BNM 

This low RM benefits tourist and export is brought up by the BN Macai netmask. Just showed how low level the macai come up with the argument 

Like I said earlier, I am more afraid of the currency raiders than anyone else,...

But Euro, Aud and Sgd have their own issues. Euro is printing money. Aud prospect depend on china which is gloomy and they may cut rates further. Sgd GDP is in minus territory.

To me, it is a gamble that could go both ways

"RBA policymakers have made clear they can ease policy further if data were to deteriorate again and, with commodity prices lower and short AUD positioning not yet stretched, even subtle shifts in a dovish direction would likely add to pressure on the AUD," analysts at BNP Paribas wrote in a report.
"We expect AUDUSD to trade down to test 0.70 this year."
http://www.cnbc.com/2015/08/03/commodity-c...marks-time.html

But cybermaster has a point. US$ cannot appreciate indefinitely. There must be a limit until their economy will be hurt.

http://www.nytimes.com/2015/07/08/business...-down.html?_r=0

But at the moment, I agree with you. US$ and S$ still the best bet

1.00 USD  = 3.85155 MYR 
Can MYR say Hello to 3.90 by tis week? 

Ringgit ends lower against US dollar
http://www.thestar.com.my/Business/Busines...llar/?style=biz

1.00 USD  = 3.88215 MYR 
After closing, drop further

Malaysia's trade surplus rose to a 5-month high in June, at MYR8.0bn, improving sharply from the MYR5.5bn in May. Exports unexpectedly rose 5.0% y/y in June, largely on the back of strong increases in electronics (13.5% y/y) and palm oil shipments (21.6% y/y). Imports, however, were soft, falling 1.5% y/y, with capital goods imports falling at the margin. This led to a rise in the trade surplus. Petroleum-related shipments continue to underperform, as LNG exports fell 45% y/y in June while refined petroleum exports were down ~10% y/y.
Read more at http://www.econotimes.com/Malaysia-trade-s...dFsmcqUxjgPR.99