I do not think currency appreciation directly impacts the property investment within the Malaysian property market. It helps businesses with loans in US$ too because then repayment will be easier. A strong currency also provides a positive sentiment and I think that’s very much needed in a slow property market. Perhaps too many media outlets are writing too many negative news? What’s the direction of the ringgit in 2019? It has depreciated by 2.9% versus the US$ as at 11th December 2019. As per many media reports yesterday, it’s going to strengthen in 2019 mostly because of the US$ (no interest rate hike) and the oil price. (stable)
Article in TheSundaily.my MRR Consulting Sdn Bhd managing partner and investment advisor Ooi Kok Hwa expects the ringgit to strengthen because everyone’s expecting the United States Federal Reserve to maintain its interest rates this year. This will cause the US$ to weaken and help the ringgit to move up. He said, “Furthermore, the trend right now is that the renminbi is gaining momentum and will probably continue to appreciate, thus benefiting the ringgit, given the two currencies’ positive correlation.” Beyond the Fed, Ooi said the uptrend in global oil price was also expected to provide a boost for the local note. He said, “Oil price is currently on the path of recovery and should maintain within the range of US$50 (RM205)-US$60 (RM246) per barrel, with oil producers reaching a pact to reduce production.” However, he said that a firmer ringgit will pose a problem for Malaysian exporters as their US dollar-denominated revenue would be lower in ringgit terms. Thus for these exporters, they may need to hedge their currency exposure. Glove manufacturers are negatively affected as their locally produced goods become more expensive in the world market. Article in TheSundaily.my
A stronger currency helps tremendously when Malaysians travel abroad, me included. Fundamentally, the currency should rise or fall due to trade and trade alone. The more competitive nations which are able to export more, their currencies should rise as the importing countries need to pay in the local currency of the exporting country. Countries which have deficits year after year, the currency should fall… Stop all these ‘expectations’ kind of currency manipulation. Technically, they are just speculative in nature and this will impact many smaller nations negatively. Happy understanding and following. Yes, let’s have ringgit strengthening to RM3.90 to US$1 this year!
written on 14 Jan 2019
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