Why has oil price bottomed?

i would think worse is yet to come with

a) World economy slowing aka China

b) Iran to contribute to supply next year

Malaysian reserves down by US$22 billion, among sharpest falls -



Mexico, Indonesia and Malaysia saw some of the sharpest falls in central bank reserves over the past quarter as investor flight from emerging markets forced policymakers to defend their currencies.

The issue has drawn particular attention after Chinese reserves, the world's biggest, fell by a record US$180 billion in the third quarter due to interventions to support the yuan after a mid-August devaluation.

But smaller emerging economies too are suffering steady reserve losses.



Investors withdrew a record US$40 billion from emerging stocks and bonds in the third quarter, the Institute of International Finance said.
Equities fell almost 20% and dollar bond yield spreads rose almost 100 basis points over US Treasuries.

Amid the turmoil, most countries tried to support their currencies, which hit record or multi-month lows against the dollar.

Mexican and Malaysian reserves fell by over US$12 billion between July and end-September, while Indonesia and South Korea lost US$6.3 billion and US$6.9 billion respectively, though some losses were down to euro-dollar exchange rate effects.

Malaysian reserves are down by US$22.7 billion or almost a fifth this year, and Indonesia has lost $10 billion or 9%.

"You are seeing net FX reserves depletion even when you strip out valuation effects," said UBS strategist Manik Narain, adding that pressure in the past three months had been the most acute since 2009, taking reserves to mid-2013 levels.

Nigeria has lost more than 12% of its reserves despite imposing capital curbs.

Some countries have been selling overseas securities, with Saudi Arabia last week reporting that the central bank's net foreign assets had fallen $6.6 billion in August to $655 billion, off last year's US$737 billion record high.

"With oil prices levelling off a bit, the drag on reserves for the likes of Malaysia and Saudi has reduced somewhat but overall risks are still skewed to the downside," Narain added.

What's more, headline reserve data in some countries may also be misleading. Brazilian reserves are stable at around US$370 billion, as the central bank does not tend to sell dollars directly, but it has a "forwards book" deficit amounting to US$108 billion, central bank data shows.

Taking into account this short-dollar position, reserves are much lower than they appear.

Reserves can be massaged in other ways.

Turkey's headline figure is a healthy US$117 billion but this includes commercial banks' hard currency reserve deposits at the central bank. Actual reserves are reckoned by analysts to be less than US$50 billion.

Reserves are still rising in some countries. Hong Kong authorities have been selling the local currency in the face of relentless upward pressure on its dollar peg and its reserves rose US$4.3 billion over the quarter and 5% since December.

Russia posted a quarterly rise of US$12 billion in headline reserves although they are down 5% over the year.

Indian reserves were flat over the quarter but have risen almost 10% this year. – Reuters, October 16, 2015.

- See more at: http://www.themalaysianinsider.com/malaysi...h.aFg15tFN.dpuf

msia alongside brazil...

A rebound in Malaysia’s ringgit will prove short-lived as the factors that made it Asia’s worst performer this year show few signs of going away, according to an investment arm of France’s largest bank.

“We’re in a situation where nothing’s changed, so therefore the only conclusion we have is that Malaysia remains a market to be short,” said Mark Capstick, a London-based fund manager at BNP Paribas Investment Partners, which oversees 532 billion euros ($605 billion). “We’re short right across the board,” he said, adding that assets being bet against include the ringgit as well as the nation’s local-currency and global bonds.

http://www.bloomberg.com/news/articles/201...-ringgit-surges

This explains and reveals why there is such a volatile movement recently.

everyone is now eyeing epf money.

There are a couple of “bright lights,” said Capstick, citing the winding down of 1MDB, the currency-swap lines Malaysia has with China and the “sizable” pension funds that the nation could fall back on. The Employees Provident Fund had 667 billion ringgit of assets as of June 2015, according to the state-controlled entity’s website.

This is a very depressing read. I fear Malaysia may end up in the same status. Recession, unemployment only to get worse. SG has nearly missed entering the technical recession. Embrace for worse than 2007.

So meaning EPF to bail us out? Oh no... That's like another form of capital control right

it is. most foreign reports are such now.

can't blame them for this attitude “The political problems will just be a constant.”

only local reports are rosy. think plenty coming with budget on oct 23.

take yr position!

Negative measures e.g. toll hike is off budget, next week budget is left with only positive and rosy news. More $ gives away to those under privileges.

today


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Tis week, USD/MYR depreciated by 1.06%

Yesterday 1 SGD = 3.010 (previous day was 3.000)

So looks like either SGD gained slightly or MYR depreciated slightly...

Lets see how the trend goes from today...

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This post has been edited by kEITh_22b: Oct 17 2015, 02:16 AM

it seems everyone's watching china - the wild card that will move equities, commodities and currencies in the coming weeks.



This post has been edited by AVFAN: Oct 17 2015, 10:20 AM

Thread becomes cold

Maybe people feel it is not a threat anymore and RM will improve ?

Next Fri 2016 Budget could b the new catalyst for USD/MYR

I think people are reactive to crisis, rather than proactive. Now that RM shows some strength, they thought the crisis is over and problem solved

But I heard that Yuan is still potential to bethe reserve currency. In that case, would USD go down and MYR appreciate?

Classic herd behaviour, see the tree and miss the forest.

USD will strengthen further.


This post has been edited by icemanfx: Oct 17 2015, 07:41 PM

It's interesting how people are getting used to the 4 to dollar level, so quickly.