Bro,... this is bad. Gov't collect more gst, the gst comes from us. And as Nexona said, others will follow suit to raise prices.

It's bad enough that our RM caused us to lose our purchasing power overseas, not even domestic purchases are starting to be difficult. Not that we don't know this will soon happen though,...

Well,... I think for exporters, it used to be good when they were collecting their payments in USD and no need to convert back 75% of the proceeds into the RM,... I'm quite sure many exporters would feel differently for whatever they export from today onwards,...

Still,... okay, got 3.25% 'FD interest' for their converted USDs into the RM, but till end-December only !

well for one the so called Interest is not so interesting at all

and yeah, they will feel "different" from now

In fact, special int rate @ 3.25% pa is until 31/12/2017
In addition they r silent on d tax treatment in respect of tis int income

so many problems we faces as weak MYR is hurting us badly, yet some are talking about how our economy benefited from weak currency, the strategy of the leaders is good bla bla

Hahaha...
I presume the word 'speculation' is part of their DNA
If v use FBM KLCI as benchmark, the index up < 1 point now despite last week feel gud factors

Till end of Dec 2017

For pure local exporter, convert back 75% won't pose much problem extra and 3.25% may a good incentive to convert back, but those intermediate exporter may need to apply for much lesser than 75% from BNM, as they need USD proceed to pay the import purchase bill, so if the measure is adopted in flexible way based on needs of exporters, there shouldn't be too much problem except previously they can keep USD, now become RM.

While exporter still can change back to USD to invest abroad after that.

This move seems that BNM just doesn't want USD export proceed floating around in the offshore market, which is one of the source NDF existence.
So the main target of this move is NDF.

Tax treatment is in the hand of LHDN, they may need to communicate with LHDN, so I believe there will be further clarification needed.

I like your analogy
Perhaps I shud consider to short now n cover my postion b4 next yr CNY for some pocket monies

Yes. I can agree on that. But for how long more or will the sellers be exhausted..?

The financial market is money driven, when there is no easy money can be made, speculative money will shy away itself, whatever left is the real demand and supply.

It didn't make sense for "actual" seller to sell RM at 4.50 offshore, when it can be done onshore with 4.35 (during the gap between NDF and onshore rate opened up time)

You guys talk about the details of forex machanism. And those technical stuff + economic theories.

Whereas the most important part which affect the value of RM is ignored ---> confidence

Why RM devalue so much compare to other regional currencies in such a short time is about the lack of confidence.

You can put 101 rules in how to manage the RM. But when people has no confidence, even 1001 rules also no use...

Just ask the aunties in the morning wet market. They also will change their RM into SGD and USD...They komplot and go to midvalley and queue at the centre court. Each person queue one line....

Yes, what you say does have its truth. Investor confidence is one of the most important factor in driving up the value of the ringgit.


But who does those aunties need to komplot to go to midvalye and queue at centre court? Cant the just change directly?

foreign analysts talk, plenty of reports, we read.

local analysts don't, cannot, so we follow, culture ma..

u know why la...

politics, emotional... thread gets locked la!

M surprise to c aunties embrace 'Every Day's a Learning Day'
I presume those aunties q up @ MV subscribed to 'pull factor' instead of 'push factor'

Yeah,... this makes sense.

I believed I too have said something similar of the above,... we can talk all abt econ theories, investors' psyche, academic equations, etc,... but end of day, I am still losing my purchasing power in my RM. And I continue to lose this as the years go by !!!!!!!!!!

So,... after this round,.. even the aunties know better that they should convert as soon as possible and hold other currencies. Not to wait and analyse anymore onto subjects like if things are bad this time, or worse earlier, and how are the signs this time,...

how else to comment?

beat up a currency very easy - plenty of examples beside here - zimbabwe, argentina, turkey...

strengthen, very hard, try naming them.

try naming 3 mighty proud nations with weak currency; try naming 3 problem dogged countries with strong currencies!

famous quote: "too strong no good, too weak no good, need just right."

so, what is "just right" for RM?

3.5 previously was too strong?

now 4.5 is just right?

or 5.0 will be just right?

and... "just right" for WHO?!

I'll just comment that your last sentence is also very right - I didn't want to think much of the rest. Maybe the 'right' of a strength of a currency is different for different people. Then for the RM, I am very sure the 'right' strength for them/us should be a currency that does not depreciate as the years go by.

That's why BNM needs to act to stablise the situation.

No one will have confidence if a currency, stocks or whatever is free fall situation.
Eg. if a stock is dropping a cent or two, investors won't bother.
But if a stock is dropping 20 cents, 40 cents consecutive each day, even the hardcore followers also will question the stocks.

When a financial target is in free fall situation, punters and voucher of financial market loves it as it is an easy meat to chew on.
There are plenty of financial big boy that punt on trend to make big money.
Look at how oil price shoot to the sky, despite there was no shortage of oil even at USD140,
and look at how punters short the oil market until it breached USD30 mark. Punter long and short the market based on market trend and herding situation.

Herding behaviour can send price sky rocketing as well as freefalling, that's why I said we need to post responsible in the forum, and not spreading any unfounded rumour as it can induce herding situation.

Financial market, banking system is built on confidence, not gold.
When confidence is lost, you will have problem, just like what happened during 2008 global financial crisis. The crisis mainly because investors lose confidence on banks, due to worry of subprime mess, and interbank leading freezing that leading to liquidity crunch.

You can't built confidence without some stablisation factor.
The peg of 3.80 back worked well, because it stablise the chaotic situation back then, by a stable exchange rate. Businesses don't like flying up and down rate, as it makes business more difficult actually, although it may result in huge gain, if exchange rate become favourable. But don't forget it can make huge loss if it is in reverse situation. Businesses just interested to make a profit through selling product, not to punt on exchange rate.

What we need now is a stable exchange rate, not up or down few% each day.


No doubt RM fundamental especially in term of foreign currency reserves and fiscal deficit may not as rosy compared to others, but there is also no doubt highly speculation factor is adding fuel on the fire.

Holding other currencies is not a good way to hedge inflation or protect purchasing power.

Inflation is everywhere and part of parcel of modern financial system, no doubt with a weaker RM, it hurts more than others.

A simple example would be investing in exporter will able to hedge the inflation as well as weak RM.

Investors those invested in those stocks, has gain handsomely over the year, it is not only protect the purchasing power, but also enhancing it, even though it is a RM denominated asset.