If 1ndb bond bond issued is not resolved by this month end, could expect myr/usd rate to drop further.

In 1998, USD/MYR was at its lowest of 4.40.

Wooooooo there horsy ... You think pegging money is the answer to everything ? You really don't know the risk of pegging money.
Doon't think pegging money is like a snap of a finger by the government.
Go search the web about risk pegging currency.. Last time Malaysia have reserved .. Now 1MDB already eaten that reserved .. How to peg money ?? You tell me !! We are not Japan produce tech and hell we are not China that produce goods.

Read and learn before you say "Pegged" currency is the answer BOY !! .


Cons of a Fixed/Pegged Rate
Is there any downside to a fixed or pegged currency? Yes. This type of currency regime isn't all positive. There is a price that governments pay when implementing a fixed or pegged exchange rate in their countries.

A common element with all fixed or pegged foreign exchange regimes is the need to maintain the fixed exchange rate. This requires large amounts of reserves as the country's government or central bank is constantly buying or selling the domestic currency. China is a perfect example. Before repealing the fixed rate scheme in 2010, Chinese foreign exchange reserves grew significantly each year in order to maintain the U.S. dollar peg rate. The pace of growth in reserves was so rapid it took China only a couple of years to overshadow Japan's foreign exchange reserves. As of January 2011, it was announced that Beijing owned $2.8 trillion in reserves – more than double that of Japan at the time.

Last time it falls to RM4.40 but the government have enough reserved to circulate the money .. till now RM ever got to 3.0 = 1usd. Last time it was like 2.7 = 1usd. How many years now and we still can't recover below 3.0 = 1usd.
And now with all the shits that happen .. I doubt we can recover to 3.0 or yet we might go 5.0 = 1usd and stay there for a couple of years.

Most bank in Malaysia have a multi currency account. So, open one and convert your savings to USD. Easy as.

Read somewhere that the reserve then was only USD30 billion but now is USD110 billion.

yes, it was. i just don't remember how low except it was pegged at 3.80 eventually.
usd125bil.
http://www.tradingeconomics.com/malaysia/f...change-reserves

before 1997, it was 2.50 for a long time, when sgd/rm = 1. now, sgd = rm2.67.

seems our gomen doesnt want the rm to appr but rather happy to see it depreciate in a controlled manner. if not,why wud bnm not intervene now with so much reserves... unless they want it that way - help exports which are hurting now. now, that in turn hurt the consumers having to pay higher prices in rm. even food and basic stuff, how much is produced locally, how much imported? my feeling is over the decades, we hv been producing less n less, importing more n more...? add base inflation, gst, etc = more pain!!

peg... if it is that easy, everyone will peg 1:1 to usd, everybody eat McD or huge steak for same price!! an economy like many around the world, that consumes, use debt easily n quickly, waste resources, does not produce/export much, low productivity popn = eventually get a weak currency, people poor. compare usa/germany/south korea/singapore vs india/russia/turkey/argentina.



so... i see few reasons for rm to strengthen anytime soon. crude price recover... ya, maybe 1-2 yrs? meanwhile, i wud expect rm to decline further. 3.80 is not unreal, imo. and gomen may just be happy with it...?

This post has been edited by AVFAN: Jan 7 2015, 08:51 AM

BNM doesn't intervene despite having adequate reserves because this time, it is not RM depreciating alone like 97, whereby at that time, RM vs all major currencies plummeting. (I remembered last time Rm:GBP 7.3)

It is against USD that RM drop the most, against other major currencies like Yen, Aud, Euro, GBP, RM is actually appreciating a little somemore or more and less the same.

That's why BNM doesn't make a move until now.

Intervene in exchange rate will only drain your foreign currency reserves faster, it is not prefer move as long as the movement of rate is still order.

Actually the lowest is 4.70 and highest 2.1

This post has been edited by anudora: Jan 7 2015, 09:43 AM

buy MYR items sell in USD to overseas.

yep, looks like it - no intervention even today:

usd 3.58
sgd 2.68

imports in usd or sgd will surely jump in price in no time...

better buy imported from USA goods now before they increase price

I think they wanted more cash to be in their bank in order to invest as the crisis during that time made most of the people is holding their cash without doing anything.

I honestly think that many people here are panic over for nothing. The government is obviously monitoring the situation and I do not think that government would allow USD 1 = MYR4 to happen.

Instead of worrying this and that, why not just move to SG and work then? SGD is rising up now.

Zeti Aziz said dropping MYR is not a problem.
Our part time FM also never say anything.
AHmad Maslan said low MYR will drive export
Why You all so afraid of??
BR1M kan ada

Panic is one thing..
but i think it is not about panic.. it is about punter/trader/hedgers taking opportunity to profit from this situation.

bystander see and comment comment only lor..

Yes it is indeed. When one falls, another will raise. When US currency drop, many people change to USD as well. Now Ringgit drop, everyone actually panic.

i dun speak for others...

it is neither panic nor attempt to profit.

just an effort to protect hard earned n saved funds from losing too much purchasing power.

anyway, ok to continue discussion or laugh it off.

damn man i just wanna know how to switch my MYR to USD beside money changer...why suddenly so many discussion..

SGD has moved away from RM 1:1 ratio very very long time ago, but US dollar to MYR exchange rate was around 2.3-2.7 most of the time until 1997 crisis. Then it dropped to a point even as low as 4.8. But after most foreign funds have pulled out of Malaysia, and analyzing the import and export balance, M'sia pegged the ringgit to 3.8 to put a stop to speculative forex trading. The ratio of 3.8 is not arbitrary, it depends on the current import and export level. If government has to do another peg in the future, no doubt these factors will be considered. And the peg can be changed if economic conditions changed, lets say oil price recovers and the export earnings > import expense.

The problem with pegging is the foreign funds do not like the rate to be dictated by a government. So they will keep pushing government to remove it. If most of the foreign funds already left the country and there is too much speculative trading (such as those of you changing MYR to foreign currency for example), the government might peg the ringgit to stop the bleeding (because everytime one of you change MYR to foreign currency, it makes the ringgit drops further), and meanwhile the government is not concerned about foreign funds opinions because they hold little investment in the country anyway.