the money changers are buying usd at msia (onshore) rate...but selling at offshore rate.....lol

never seen the usd spread so big at downtown money changers...

interesting....dci restarted,,,,maybank spot is 4.29....whereas the international spot is 4.39....wonder if there is an arbitrage opportunity here...

There might be an arbitrage opportunity here....buy usd via dci, at bnm sanctioned rates, then cross convert to a 3rd currency via another dci..... theoretically can get more 3rd currency with less myr.....

Hot funds are moving back to the USA, so demand for usd will persist for some time....if bnm don't react, the myr will stay low, even lower than now....or bnm can respond by selling usd, but that will deplete reserves....or they could continue current directive to ignore nfc overseas and only quote local rates, effectively fixing exchange rate, but potential dire consequences the longer this control is in place....

If the Fed raise rates....the outflow will worsen....unless bnm raise rates as well....which will dangerously increase defaults of local debts...

bnm had never stopped trading of usd...

it's actually between a rock and a hard place....or the devil and the deep blue sea...but the point is taken.... lol

because the majority don't have the reserves to "invest offshore"....

the majority of those that do, will have hedged to variable extend....

last friday's halt wasn't mandated by bnm....but by the banks themselves, when they find the ndfs too far off the local rates...it was only a few hours, and by about 3pm, dci was back for bidding...

bnm's role was in informing banks to NOT honour any ndf and ignore the offshore rates....never instructed banks to stop trading...

This post has been edited by limeuu: Nov 14 2016, 01:04 PM

every time there is some kind of financial shock, doomsayers will lament and pine....but with time, water finds new level, and life goes on...

the msian economy, while not in the most robust of health, and in rather "incompetent" hands (not really incompetent, just playing to the tune of an alternate agenda), is actually quite resilient, and adaptions will be made...

people thinking of jumping ship, well, do it....and i doubt that will be because of current issues, but more of a long tern plan in response to long standing issues...

although common sense will tell you this is the worst time to do so...always make a move when things are quiet, and when perhaps your myr is worth more...

Isn't this a bit late?.... especially if you know you have foreign currency needs way in advance?....

I hedged children's education needs 5 years ahead, during my time....

of course not....i hedged about half...but as it turned out, i didn't need most of it, and when payment times came, the rates were still favourable, and i just paid with cc....which in turn earned me a few j class redemption airtickets....and the hedged funds now come into usefulness with the sinking myr....on paper at least...

bnm doesn't have much of an option anyway...reducing rate would be suicide at this point....raising rate will also be killing a lot of businesses and people, who are highly geared...so no brainer staying put....

however, come next month, after the fed raise rates, then they are really in trouble...who to defend?...the myr value and the bigger economy?....or local geared businesses and individuals...many may be malay/umno linked...

the sensible move is raise rates too...debts can be restructured and mitigated...but politically may not be acceptable...

Only if you buy goods and services with no foreign input at all...maybe goreng pisang in kampung..,

If anyone can correctly predict currency movements, you think they will be working as a economic analyst in a bank?...lol

when a currency weakens, it produces what is called imported inflation...

how much imported inflation there is depends on how much of the production and supply chain is based on imports based on a foreign currency, usually usd...some things has minimal import component....eg pisang goreng in the kampungs....only the flour is imported....some are fully imported, eg cbu cars, luxury bags, cosmetics etc....

it is not easy to find things completely shielded from imported inflation....in any case, traders will still use that as excuse to increase prices even if it is a only a small component of their cost....

so it is inevitable that goods will increase in prices with the weakening myr...

A smart consumer should know how to differentiate between needs and wants, full stop...

Proven what?...

while this is a thread on usd/myr exchange rates, there is nothing wrong if members of the lyn community alert others, especially new comers about issues with some forumers...

i for one did not know about the dispute facing aromachong until highlighted here...so thanks to avangelice for bringing this up....

as to moderators, i fell some are over zealous in their role, and some common sense needs to be used, in setting the borders of a topic...

was it my imagination, or was this thread locked for a while yesterday...

The 'stability' is artificial....from bnm blocking overseas ndf from the local market....whether it will hold, is the million dollar question....how long can bnm do this before it boomerang?