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 ringgit Malaysia drop , how to I change my RM to USD

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cherroy
post Jul 3 2015, 08:45 AM

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QUOTE(Ramjade @ Jul 2 2015, 08:01 PM)
Fourth, not sure is true or not, malaysia borrowing money in USD to pay debts. One thing I know after reading all of Gen-X's post, borrowing money to pay debts is digging your own hole. Imagine borrowing personal loan, "quick cash" to pay your credit card debts on a bigger scale.

Fifth, we are not USA, USA is in shit load of debts but because the world's trade is based on USD, there will always be demand for it.  Also they are superpower of the world. Who dares fight them (apart from China and Russia)?

Good to have a backup some where.

Hope I made it clear.
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4th. Most Malaysia debt is in RM denominated, >90+%

We cannot look at national debt as same as personal debt level.

Nobody demand the national debt to be repaid entirely.
As long as the country can service the debt and able to refinance indefinitely, the risk is minimal.
But for personal debt, bank demand the person to repay entirely interest + principal in sometimes.

Hence, as long as the country able to repay interest on time, able to refinance whenever the old debt due, the country debt is not in risk.

So it is important for a country to have a manageable debt level, as the higher the debt, the higher the interest payment.

Greece issue become more complicated because they do not have their own currency.

cherroy
post Jul 6 2015, 08:33 AM

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With Greece vote for No in the referendum, USD is expected to rise further.
So won't surprise RM vs USD > Rm3.80 or may even more.
cherroy
post Jul 9 2015, 08:17 AM

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QUOTE(Hansel @ Jul 9 2015, 02:50 AM)
How much does tourism and medicl tourism contribute to the GDP ofMsia ? Do we have the numbers ?
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About 15% based on the report.

http://www.wttc.org/-/media/files/reports/...alaysia2015.pdf
cherroy
post Jul 9 2015, 08:24 AM

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QUOTE(xftwww @ Jul 8 2015, 10:12 PM)
I think you're looking at this the wrong way. It is not a case of weak or strong currency = better, it is more a case of cause and effect. On the one hand you have a weak currency being one of the CAUSES why China is super competitive, combined with lower wages and standard of living, operating cost is cheaper despite exports of goods, therefore EFFECTING it's high growth. On the other hand, Japan's weak currency is an EFFECT of it's almost 0 inflation rate and 0% in gdp growth for the past decade, the cause of which is declining fertility rates and population growth.

Malaysia is currently facing something more like the Japanese problem but not exactly. The Chinese government PURPOSELY held down the currency, until the US government launched an investigation. But we are facing a fall in our currency due to a 'crisis of confidence'. No one trust our banks or government, so they RUN to safer currencies.

It doesn't matter if our semiconductor contributes to a 3rd of GDP or not. Unless you can tell me that it was 10% this year and GREW to 33% BECAUSE of a fall in currency, I don't really see the difference. I don't believe the growth in semiconductor manufacturing as a function of a GDP shows anything other than we have HISTORICALLY been a cheap producer.

If you want a good example of what is happening to Malaysia. Look at Russia over the last year, and it's currency. We look more like THAT than China.  sad.gif
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Why we want GDP growth?
Because we want to build up wealth, increase per capital income, increase purchasing power so that people are better well off across the nation and prosperous.

If the country need a weak currency to grow, indirectly means purchasing power is sacrificed,
which in the end of day, you have GDP growth but no increase in purchasing power, it is like a zero sum game already.
cherroy
post Jul 9 2015, 02:33 PM

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QUOTE(Hansel @ Jul 9 2015, 01:56 PM)
If the currency is wek, the purchasing powr will be sacrificed ONLY IF the nation affected imports most of her everyday items. Othrwise, no. Thn this leads to personal inflation - if one uses mostly overseas items, thn his/her purcjasing power wil be affected.
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Even you don't buy import items, there may be inflation on local export goods, (set aside the issue that we won't able to escape from import goods, as in today world it is impossible to be self sufficient in every aspect of goods and foods)

Eg.
Palm oil is produced here and an export item.
When USD vs Rm was RM3.00, palm oil price may be RM2000.
Now USD vs Rm become Rm3.80, there may be increase in demand for palm oil, as it become 20% cheaper.
Increase demand potential higher price.
So export items also may become expensive due to market force.

Goods price is not dictating locally nowadays but overall demand/internationally.

If local price is too low and not profitable as compared to a better price in export, business will export the goods or elsewhere that have better price, so you have no supply locally until local up the price.
cherroy
post Jul 15 2015, 10:40 AM

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QUOTE(Ramjade @ Jul 14 2015, 09:10 PM)
Hi,

Just want to ask, we saw that bnm defended the ringgit at 3.8. So in the event US increase the rates, any chance it will go beyond 3.8?

Cause the way I am looking at is bnm won't let it go pass 3.8. But we all know that can only happen if bnm have enough foreign reserve.

Need your opinions
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BNM won't defend the RM indefinitely.

Foreign currency reserves is essential to fund the import bill and outflow of money, BNM cannot exhaust the last single USD to defend RM at RM3.80.

Central bank intervenes the forex market generally is to "calm down" the market, prevent excessive movement that can affect the confidence issue.

If USD rise due to its own fundamental (better economy, higher interest rate) and against across the all major currencies, BNM has to let it rise naturally as long as the movement is orderly matter.
If it is USD strength alone, it won't cause much too much negative impact to the economy state.

cherroy
post Jul 15 2015, 11:20 AM

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QUOTE(Hansel @ Jul 15 2015, 11:10 AM)
If USD strengthens because of its own quality, thn the RM will weaken vs the USD - which is what we are seeing across the board. But why should the RM weaken across the other currencies besides the USD?

The painful part comes in whn the RM weakens across everybody,.. thn regardless of whether we transact in the USD or not, we are at a huge disadvantage.
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A simple glance through.

RM vs USD from Rm3.20 to 3.80 (Down near 20%)
RM vs SGD from RM2.60 to 2.80 (Down about 10%)
RM vs AUD from RM3.05 to 2.85 (up about 6%)
RM vs NZD from RM2.75 to 2.60 (up about 5%)
RM vs 100 Bath from Rm10 to about RM11.+ (Down about 10%)

RM is weak but situation is not as same as 1997.

USD is indeed very strong.

Many years ago, many bashed USD fundamental and so bearish about USD, now USD is the strongest currency in the world.
cherroy
post Jul 20 2015, 01:19 PM

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QUOTE(AVFAN @ Jul 20 2015, 11:48 AM)
that bit makes sense, so we only have to ask - are the politics of late improving or getting worse? is governance in handling public funds improving or getting worse?

there are also other things - inflation is creeping up:
http://www.tradingeconomics.com/malaysia/inflation-cpi
will gst cause slower spending to cause gdp growth to slow to prompt bnm to cut int rates?

there is no data at this time to support a stronger rm w/o bnm intervention. we wait for june-july exports, trade balance and fx reserves data - that will give more clues incl the first clues since bnm intervention.

uncertainties there will always be, esp external ones. it is a matter of how well prepared a country is, how to minimize the negative impact and not add more trouble to it.

btw... aussie, kiwi, russian, turk, brazilian currencies been battered too and they also say their currencies are way undervalued, fundamentals strong. who is to say they are right or wrong except free market forces?
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Based on data alone
- reduce fiscal deficit
- better than expected GST collection
- removing fuel subsidy (which in return should reduce further the fiscal deficit)
- GDP growth although expected to slow down, still expect to be in the region of 5%.
- Despite slow down in export, still register reasonable well trade surplus.
- healthy banking system and at historical low NPL.

If one set aside that issues related to politic that affecting the sentiment of trade in financial market, the economy number alone suggests it is not too bad of the economy picture, that's why BNM governor said RM level is not matching the fundamental figure alone.

Fyi, RBA even RBNZ at times had been repeatedly saying their currency are overvalued.
cherroy
post Jul 20 2015, 05:29 PM

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QUOTE(Hansel @ Jul 20 2015, 05:02 PM)
DIVERSIFY currency holdings,.. that's the only way,..too hard to guestimate which is really strong and which is not, and which will be killed by sentiments and rumours alone,....
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Holding other currency, yield zero interest generally, as most are near zero interest across.

So, diversify the asset allocation is preferred.

Eg.
If RM is depreciating, those export in USD will gain from the RM depreciation, so by holding those company shares, indirectly hedging against RM.

Same with holding foreign ETF, bonds etc.


This post has been edited by cherroy: Jul 20 2015, 05:46 PM
cherroy
post Jul 24 2015, 08:02 AM

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QUOTE(Showtime747 @ Jul 24 2015, 07:03 AM)
BNM has used up 5b in less than a month just to maintain 3.80. Zeti has only another 20 times of 5b to fight for RM

Zeti must be very nervous. So do I. Perhaps shouldn't be too complacent  sweat.gif

If USA increase interest rate, will Zeti follow ? She hasn't not much choice has she ?
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Unless the situation is so desperate, it is unlikely for BNM to follow US increase in interest rate, as by doing so, it will compound the pressure for business cost across with newly GST + rise in interest rate that may hamper the economy growth significantly.

BNM won't intervene forever, the recent intervention is needed because the drop is simply to fast, whereby they need to "calm" the market by stablise it.

cherroy
post Jul 24 2015, 09:27 AM

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QUOTE(Showtime747 @ Jul 24 2015, 08:50 AM)
If Zeti won't follow interest rate rise, she needs to spend more of the reserve to intervene. Although she has 100b left, but when it touches 80b balance, she will be forced to re-think whether the intervention is effective. She has only a shallow pocket maybe she will be forced to increase interest rate at that time, after another 20b turn into smoke

RM should not be that weak fundamentaly. It was the confidence in the currency that has weaken the currency. Thanks to the people managing the economy  thumbup.gif  nod.gif  notworthy.gif  icon_rolleyes.gif

Getting interesting in September.
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If USD rise because of interest hike, BNM still need to let RM depreciates against USD, as long as the drop against USD is not too steep and orderly, BNM may not want to intervene too much.
The intervention recently is more because of too steep and fast pace how RM drop against USD, not because want to defend RM at which level.
A too fast pace and steep movement may cause the confidence issue which may compound the problem that's why periodical intervention need to "calm down" the market.

Just like how recent China stock market plunged that lead to massive fire-sale in the market that lead to bearish sentiment, even though the market is actually still making decent gain over the year.
The stock market keep on plunging like no tomorrow, until there was some intention of intervention from the gov, or authority policy that soother the market.

Interest rate hike is not a good solution to deal with such situation.
There is a difference between USD strength alone vs RM weak across currencies.

The situation is like USD strength consist of 80%, while RM weakness make up the rest 20%. A small hike won't fix the 70%, but the hike may risk the economy in term of slowing down.
Economy slowing down - a weakness factor for RM. If so, it is back to square one, the hike become no effect.

If RM vs other currencies, the weakness generally about 3~10% only, as compared to USD that has dropped about 20% since the RM peak.

The weak RM has a lot to do with market sentiment which make worse with recent saga that compounded the outflow. (please don't post discussion on non-related to pure financial issue, as we don't want the topic being derailed, ty)

Based on economy data alone, RM fundamental is not that bad actually.
cherroy
post Jul 26 2015, 09:32 PM

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QUOTE(wil-i-am @ Jul 26 2015, 04:01 PM)
I refer to international where they operate 24 hours
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There is also no trade over the weekend internationally.

Futures market are closed as well.
cherroy
post Jul 28 2015, 08:02 AM

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QUOTE(langstrasse @ Jul 27 2015, 09:59 PM)
Just wondering, is the large number of foreign workers in Malaysia who send money back to their home countries a contributor to the Ringgit's weakness ?
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Those foreign workers may send ten of billion RM to their respective countries, but they do contribute to the manufacturing, plantation activities that are essential to bring in trade surplus (USD into Malaysia).
So the net effect may be neutral or instead may positive to RM due to trade surplus may bring in more USD which a positive factor for RM strength.

While a legitimate foreign worker levy is Rm1250 per person per annum in manufacturing sector. With estimate 2 million of them, 2 mil x Rm1250 = 2.5 billion levy can be collected.

The recent weakness has a lot to do with money outflow, typically from stock market, and poor sentiment towards RM due to issues around.
cherroy
post Jul 28 2015, 02:31 PM

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QUOTE(Hansel @ Jul 28 2015, 12:30 PM)
So many uncertainties today...
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Everyday also got many uncertainties. Get over it.

Years ago, we were not certain oil price will shoot up USD200 or not, or gold will go beyond USD2000.
Back 1997, we were not certain that economy can recover or not.

There are only 2 certainties in our life, death and tax. tongue.gif

If fact, there more uncertainties, the more opportunity in the investment market, if one looks at different angle.

Actually currently, the uncertainties factors are not many as compared during several crisis/recession over the past.

1. USD is predicted to have a hike in interest rate, hence USD will have plenty of strength. <--- this is not uncertainty at this moment. Pretty know across, not a secret.

2. Worldwide economy is expected to slowdown a bit. <--- not uncertainty, more and less within many expectation.

3. As a result of slowing down across, commodities price is expected to be soft mostly. <--- not uncertainty.

4. Worldwide interest rate won't shoot to the roof. <--- not uncertainty.

From here, we can see the uncertainties are actually not that too many, as compared to 1997, 2000 dotcom bubble, 2002, 2008.
cherroy
post Jul 30 2015, 09:37 PM

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QUOTE(Showtime747 @ Jul 30 2015, 08:41 PM)
3.82356  cry.gif

Zeti has given up ?
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If vs other currencies, RM doesn't drop, then it is best interest to let USD vs RM rise.

As in this kind of situation it is USD rises, instead of RM drops.

USD simply has a lot of strength lately.
It may even parity with Euro.
cherroy
post Jul 31 2015, 03:34 PM

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QUOTE(aeiou228 @ Jul 31 2015, 02:45 PM)
I'm quite agree with Hansel's suggestion investing in USD-denominated instruments.
Mind elaborate why maybe not and two edged sword ??
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Prior before the 2008 financial crisis, USD was labelled as a currency worthless to hold and keep on going down.
At that time, many including professional traders/analysts said US had tremendous debt, the only way for USD was going down.

USD index against basket of major currencies plunged from 100 sink to around 70.

Against RM from RM3.80 to RM3.10.

There is no certainty in investment.
Having USD denominated asset seem a wise choice now, but situation after 5 or 10 years later, we never know whether it is still a wise choice.


cherroy
post Aug 1 2015, 10:02 PM

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QUOTE(hangus @ Aug 1 2015, 04:44 PM)
» Click to show Spoiler - click again to hide... «

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Pretty agree what had posted, just there are 2 area that Malaysia is worst off than 1997

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.

cherroy
post Aug 2 2015, 04:05 PM

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QUOTE(AVFAN @ Aug 2 2015, 11:26 AM)
do you see a chance in the next yr or 2 this deficit will be reduced?
i see it growing even faster - sustained low oil price, ge14 preparations coming.

the hardest hit ones are the older mid-low wage workers or retirees with small savings who don't get any help incl br1m.

actually, alto the rm is the worst performing currency in asia in 2014 and 2015 so far, it is not as bad as some others elsewhere.
considering the state of the currencies of similar commodity exporting nations with corruption and governance problems like brazil and turkey, it probably does not take a global meltdown to bring the rm to that level.

that was an old post form 6 mths ago. i think at that time, it was still widely thought that if a peg worked before, it can work again.
but of course, we know it is costly, risky and proven disastrous in many other cases.
the last 2 weeks... just my observation..., it seems bnm's been intervening to "peg" the rm not to the usd, but the sgd at 2.78. singapore is msia's 2nd largest trading partner, #1 being china (rmb pegged to usd) and usa #3.
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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.

Peg only can work if you have good trade and current account surplus, and capital control, whereby capital won't able to fled easily in a massive way. If not it will drain the country foreign currency reserves fast by then the peg becomes non-sustainable.
cherroy
post Aug 4 2015, 11:38 AM

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QUOTE(Showtime747 @ Aug 4 2015, 11:28 AM)
Good point on USD

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

For me to change physical currency, google the money changer located near your place and call them to ask for the rates. Usually if you change more, they can give better rates. Can try mid valley, Sg wang and those with a lot of traffic usually their rates are better
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If look at trade deficit, current account deficit, Aud fundamental is actually quite weak.

There is no "safe" currencies at the moment, every currencies has its own issues and problem, except USD.
Even for so called "inflation hedge" gold also has its own downward pressure.

Nowhere to hide... laugh.gif

That's why USD is "super" strong now, as "nowhere to hide".
Now nobody talk about trillion of debt of US, but only interest hike. whistling.gif
cherroy
post Aug 4 2015, 01:28 PM

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QUOTE(mois @ Aug 4 2015, 11:58 AM)
You guys not afraid of george soros attack?
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Soros retired already... tongue.gif

1997, fundamental for RM was poor (high trade deficit, current account deficit + low in foreign currency reserves), hence open up opportunity for hedge fund to speculate in the market.
Somemore, last time, forex market is more "free" as compared today.

Now the fundamental is not as bad and stringent regulation.

Recent slide in RM has a lot to do with sentiment instead of fundamental.
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