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.

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.

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

u mean depr against $, which is correct since it is the #1 currency, many internationally traded items priced in $.

in the last 10 years, not many has stood strong against it - i can only think of Yen, SGD, swiss franc, AUD.

others lost incl RMB, Euro, GBP.

the worst losers, u already know.
the worst hit people are the pensioners/retirees.

next worse are low-mid salaried workers.

more so when most food and daily essentials are imported.

crime rate will rise for sure.

so, i don't buy this moronic statement "weak currency can be beneficial".

if u mean holding cash under the pillow, i agree.

but i would think those who do that do that with small amounts only.

the bigger amounts would have gone into foreign investment vehicles one way or another.

To your first four sentences, sure, the USD is no doubt strong if 'it wishes to be', and well,... okay, people can always say if all the other currencies are falling, RM fall can't be helped,... BUT,....... why must RM fall against the Yen, the SGD and the rest in yr list too ? Why must our RM come up as the worst losers ?
...

I know our RM does not have the above 2 qualities for BNM to devalue her, it's all in the textbooks,.... But reading some latest inputs here on possibly BNM is thinking abt devaluing the RM, since it's the way countries behave today makes me think of racing for the door again to convert everything out.

Makes me think like this now : "Even if the RM is weak now, never mind-lar,... better change now before BNM devalues it further"........

Err,.. bro,.. sorry, can't agree with the bolded statement. Don't hold foreign currency cash to protect against inflation, be it inflation in Msia or inflation at the foreign country, depending on your plans for the foreign currency, and on yr plans in life. Especially if you are holding foreign currencies of the developed countries, the FD interest is too low,..

u read wrong la!

i said holding cash under pillow is not good.

part 1... our power brains incl mo1 already answered u: "it's all external, beyond our control, not too bad".

part 2... i seriously think that is a real possibility given the way things are at this time.
watch dev in run up to GE14.
here, politics totally drive economics, like it or not, talk or not, deny or not.

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!

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,...

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.

2 option :

1. Buying shares in foreign currency with high dividend yield counters and bank instruments
2. Buying shares in RM with high dividend yield counters (including export counters) and bank instruments

In the past 1.5 years, in RM terms, #1 gives me ~23% return. #2 only ~6%

Definitely #1 is a better hedge against inflation and preserving purchasing power

1st appeal by industry players

MARGMA Calls On BNM To Review New Policy On Conversion Of Export Earnings Into Ringgit
http://www.bernama.com/bernama/v8/bu/newsb....php?id=1309079

Anyway,.. just for academic purposes, let's say we don't do 1. above, but we merely just converted our RM into the SGD a few weeks prior to Nov 8, and held on to the SGD cash till now, at last exchange rate, we would have made more than 6% IF WE ARE TO CONVERT BACK to the RM today at the money-changer. Don't talk too much about the spread,.. Maybank's spread is killing,...

1st appeal by industry players

MARGMA Calls On BNM To Review New Policy On Conversion Of Export Earnings Into Ringgit
http://www.bernama.com/bernama/v8/bu/newsb....php?id=1309079

i have a real example.

in jan 2015, i bought some SGD with RM.

rate at that time was, on my record, 2.6765.

if i want RM today, i will get, on my broker data today, rate of 3.0885.

no interest, but 15% net over 2 years in RM terms.

ok or not?