My usual readers would understand my position about Ringgit and Malaysia’s economy. You can read latest one here: 1998 vs 2015, just numbers, no rhetorics Will not be saying too much. There are many articles about this today and I think it’s best for me to read them and summarise instead. Today Tan Sri Zeti answered lots of questions and I think the market has also reacted positively, at least for now. Ringgit is still above RM4 to US$1 but has since rebounded slightly. Volatility is the flavour of the day for many more days to come.
Economic growth for Malaysia slowed to 4.9% in the second quarter of 2015, compared with 5.6%. This growth is supported by continued expansion in services and a turnaround in agricultural production.
Private consumption expanded 6.4% in Q2 versus 8.8% in Q1. This was due to growth in the consumption on food & beverages, housing & utilities, communication and transportation.
Pegging? There are NO plans to peg the Ringgit. Volatility would continue until there is certainty in direction from major economies. Yes, this definitely includes that country which is still thinking whether or not to adjust its rates upwards.
Inflation? Up 2.2% in Q2 2015. Expected to go higher with the effects
Retirement? Zeti WILL remain governor till end of her term which ends on April 2016. I seriously hope she does not suddenly loses her job. Read here: Uncertainty in Malaysia? My personal 4 signs She has been Bank Negara Governor for 16 years and has been with BNM for 35 years. I think it’s ok that she can pursue her next goal which is to write a book.
Stupid rumours about Bank Negara and herself? She said, she did not suffer any heart attack. If only the anonymous person who spread such false rumours are found, she will take legal actions.
Inflation was higher in the second quarter, growing at 2.2% and will go up higher before moderating by mid 2016.
Ringgit depreciation? Bank Negara would only ensure an orderly functioning of the market to avoid disruptions to trade and business activities. What about the rest in the region thus far?
Region currencies versus US dollar? Ringgit is down 13.33%. Indonesian Rupiah is down 9.88%. South Korean Won down by 8.35% and Thai Baht by 6.99% After two days, Yuan is now down by 4.61%.
BURSA market? Rebounded today, 11.69 points up. 714 shares up while 217 is down.
Last but not least, her exact words: When she was asked about the US$700 million that was deposited into the personal account of Prime Minister Datuk Seri Najib’s, she replied that she would only reply within the confines of the law. “Otherwise the moment I step out of this door, I will face arrest for talking about individuals’ accounts. I am sure you do not want that to happen,” she joked.”
Until today, there are still people asking me or searching online for questions as to whether Malaysia would fall into a recession. Kindly understand what is a recession before asking such a question. Once you understand, then there’s no need to question that, for now. Happy reading.
written on 13 Aug 2015
next suggested article: Lower car sales growth, not a good sign