well, i am not so sure you are right.

if bnm cut rates, there are consequences on bonds, fx, swap rates, reserves, etc.

it is not possible normal banks can continue to do their own thing while major changes happen as a result of central bank action.
i'm not a banker and not a serious borrower, so i don't really know.

we need a knowledgeable banker here to answer this. anyone?

banks can go bankrupt for all sorts of reasons. but that is not the question.

the question is whether banks need to follow bnm rate cuts or hikes by banking rules.

or they can stick to their own lending and deposit rates?

answer seems very hard to find!

i don't get this.

Cut rates and MYR goes north?

Well,.. now you are saying you do not have a crystal ball, but earlier you said there is not going to be stricter rules of capital control in the foreseeable future. You have started to contradict yourself even before the days start to go by. Why back down so fast ?

All that I have said earlier have been blanketed by my two main sentences, which I have also included into my signature at the bottom of my posting space. So,.. please do not harp again and again, and repeat unnecessarily what you have said of me earlier. Since you used the word allegation in your first 'hit' against me, I have been respectful enough to you to include those two sentences.

I will respect all who put in their opinions and comments, NOT only the ones from you. So, I have put in a caveat into my earlier postings, what else do you wish me to do ? You are the admin, if you don't like those postings, you know very well what to do with your keyboard. You do not need to repeat what you have indicated to me earlier.

You are OT'ing unnecessarily by repeating what I have adjusted !

It is a critical juncture for investors between : the door is closing and the door has closed. You are of the opinion that everything is fine, and with no possibility of further 'closures'. You kept telling the forummers that the central bank's steps are still mild, and not too bad. You kept telling the forummers that things were very much worse back in 1998, and things are better today.

I, on the other hand, am giving the forummers an alternative view. Then, this afternoon, you called my postings as allegations,.. sure, I respect that, hence I put in two sentences to be 'fair to the readers'.

I am relaying this message to the forummers : act first in preparation BEFORE the full closure comes, should it come. No point to delay and suddenly if it comes, regret why mitigation steps were never taken earlier. Events have happened once back in 1997/8, how would we know that such events will not repeat this time ? Anyway, forummers reading my posts are free to do what they think they should or should not do, even before I put in those two sentences.

By the way, what's wrong with taking quicker steps to take up some investments outside, as a form of diversification, even if the full closure does not come ? What's wrong with taking quicker steps to invest in a stronger currency outside ? What's wrong with doing all the above now since the motivation is there, seeing all these events taking place now ?

Now's the time to do so, since,... as you said, there is NO capital control in place, and if we follow the rules and provide the proper docs, it should not be a problem to TT out. If not to do now, then wait till when ??

Till the events of 1998 appear again ? Or,.. to trust what you said that 1998 will definitely not come again,.. and we don't have to do anything at all forever....

My point of view,...you can choose to do what you wished to !

Hence,... forummers,... [B]please move quicker before you can't even transfer funds out anymor[/b]e,....

It is not in BNM interest for RM to strengthen. They are satisfied with a stable and undervalued RM at 4.45.
As long as RM is stable, it is unlikely that BNM will introduce more measures. Their objective is achieved. They are not stupid to push RM upwards only for speculators to sell more RM to them at higher prices. At current prices, sellers of RM are selling at undervalued levels and I think the longer RM stays at this level, the more exhausted sellers of RM will be. After speculating interest die down, RM will then strengthen.

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 ! 

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

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

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....

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,...

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

Yes, it will be a good step,.. and if bro AV can get : 15% net over 2 years in RM terms,.. I think can cover the normal inflation, staying in the city.

However,... comparing against an earlier method quoted by another forummer who recommended investing in Msian export counters to hedge against inflation,.. then cannot meet normal inflation if staying in the city.

Well, since you replied me and are willingly doing so,.. okay-lar,.. 

People who convert into the SGD should not be laying their funds in cash only, as you assumed earlier, come on, bro....

At least now we have a figure. With a figure of an exporter share rice rising over 30% in the last two or three years can easily be beaten with SG REITs and instruments,.... ,.... but it's good if an Msian exporter share can oerform like that. If you wish to be helpful, please tell us the counter.

Of course, must convert,.. if don't convert, how to spend in Msia ??    Unless one intends to spend overseas, and perhaps intend to enjoy a life overseas in future, or for the children to study overseas, of course, must convert back to use in MY. That is the whole point of this discussion, right ?

Who asked yu to change at the money-changer ?      One of the skills involved in investing overseas si also to know :-

1) All the most effective mechanisms to convert your funds in and out.

On top of taxation in the different countries, which I have talked about earlier,....

Tell me : why would you not want to diversify your currency holdings into other currencies if you are already earning the RM in this country ? Tell me without saying that we should, but the way I did it earlier was an allegation,... 

This one I didn't study,... The nearest to this would be my exposure in high-yield bond funds denominated in the AUD,... invested in fund houses in Sgp.. I do directly into the country itself,....

Imaging if some exporters need > 25% FX to pay for FX-denominated costs, and the FX movements not in their favor during the USD-MYR and MYR-USD exchange

i thought when interest rates rise, REITs tend to tank?