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Increasing cost of living a certainty

During one of those political debates many months back way before 509, I told a super confident friend that whether the government changes or not, ringgit’s movement is not going to be dictated only by what happens locally. It’s a currency which is traded internationally and unfortunately it’s no longer just trade driven but sentiment and expectations driven most of the time. Earlier article here. He argued that this was all due to that one person and it’s connected to 1MDB. If only solving one thing can solve everything…

Article in TheSunDaily.my here. Domestic Trade, Consumerism and Cooperatives Minister Datuk Seri Saifuddin Nasution Ismail shared that the depreciation of ringgit against other major currencies has contributed to rise of the cost of living in Malaysia. He said, “The movement of currency is beyond our control, but what we can assure here is that we will contain this problem and assist the rakyat.” The government will focus on six areas to reduce the cost of living.They are food, housing, utilities, transport, education, and healthcare. He specifically mentioned that extra focus would be given to the B40 (low-income segment). This will start with the launch of the food bank where supermarkets, restaurants and hotels throughout the country will donate excess food to the bank, who in turn would distribute the edible items to the underprivileged B40 group. He also said that the ministry will draft an enactment to govern the formation of a Food Bank in the country, using models applied in France, US, Australia, UK and South Africa as references. Article in TheSunDaily.my here.

Courtesy reminder to everyone who puts the currency as the one to blame for everything yeah. Ringgit has depreciated by 2.9% for 2018. Here’s that latest article. Assuming B40 uses half of all their salaries to buy only imported goods, this may be something like RM3,000 x 3% = RM90 per month. The Bantuan Sara Hidup is enough to cover this ‘deficit.’ What’s more important is however to raise the qualifications and employability of these B40 households. Higher FDIs meant more employment and this will result in more higher paying jobs. Then, teach financial awareness so that they could manage their money better too.

Remember, they must have a roof over their heads which they own. Earlier article: Else, they will always be in poverty. Examples abound even in advanced countries. That RM90 savings we talked about above is NO MATCH for the rental which a poor household have to pay every month. This is why they remain poor.

Yes, I remain committed to my thought that Ringgit is undervalued. We have trade SURPLUSES okay versus THAT country with super huge trade deficits and yet blaming everyone else except trying to change itself… Happy following.

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written on 27 Dec 2018

Next suggested article: A weaker ringgit due to a stronger greenback

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Charles Tan The Founder The Writer Kopiandproperty
Charles Tan

Charles is Founder of kopiandproperty.com He writes from his investment experience for the the past 20 years in investments including property, stock, unit trust and more as well as readings and conversations with many property gurus in the industry. kopiandproperty.com is an independent property blog which is not affiliated to any media company, property developer or even real estate agencies.

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