A Facebook comment I saw prompted me to write down my personal views about my country’s currency, Ringgit (RM). Of course, if that Facebook user can write his comments and share with the world, I should be allowed to also write my comments with actual references to actual currencies in the world. This is not just based on an empty comment like, ‘RM is going to be worst than 1998’ or even ‘Currency may need to be pegged again to save it.’
RM is down versus US$. True. No one can doubt that. Following are the major currencies which has ALSO depreciated versus US$. Yen, EURO, British Pound and even RMB. Are all these currencies also in deep trouble? The last I checked, answer was no. Or perhaps another side of the coin would be, is the US economy doing exceptionally well for the past 12 months? Growing, sure. Exceptionally well? I found nothing of such report but I did find many more negative reports and even a few predicting the US stock market to be on the verge of crashing.
Then, why is RM depreciating every now and then and it’s a downtrend? My personal opinion is that when times are uncertain, the current more international currency would be considered a safe haven to park their money in. This international currency as at today remain to be the US dollar. Economic growth last year was 5.8 percent in Malaysia, hardly considered low.
For 2015, despite whichever way the currency is moving, it will still be around 5 percent. This prediction is the view of majority of all analysts whether local or international ones. Do note too that even when it comes to rating from international rating agencies, Malaysia continued to be rated at the ‘investment grade’ level. We will see if the next one is a downgrade then.
Oh yeah, have you been to developer launches where the properties are priced below RM500,000 today? Go and feel the ‘carnival’ environment. When was the last time you have been to a Starbucks and could not find places to sit? The car sales continue to be up, especially for the foreign brands. The export of electronics remain strong and tourism had a good year last year too. None of these should be happening if the economy is indeed going down the drain.
1MDB affecting the whole economy? Haha. 1MDB will affect a lot of people, definitely. Especially the names and the companies mentioned one way or the other. However, it will not be a major reason why Ringgit goes up or down. Oh yeah, remember, stop SPENDING your money if you truly believe the crisis is about to arrive. It is much more prudent if you have cash during an economic crisis. Every economist or even accountant would tell you this advice. Please follow. Happy reading and believing and please take action!
written on 12 March 2015
Next suggested article: Capital Control, not this time
