There is no need to read this particular article if you believe ringgit is dropping because the economy is in a crisis. We are in trade surplus while that other currency is SUFFERING from trade deficits. That is one reason why its new President will boost its economy soon. Anyway, back to ringgit. I seriously believe everyone should have their own set of beliefs. Just be reminded to act accordingly. However, if you like to learn a little about the ringgit from someone who is not from the politics circle, then this is for you. These are the comments by Bank Negara Malaysia’s governor Datuk Muhammad Ibrahim which was published in an article in thestar.
He said that the main reason for the recent measures is to stabilise the ringgit. The full impact from the measures should be seen in mid-2017. To anyone who thinks this is capital control, he said, “However, these new measures are not capital control or fixing of the ringgit but to stabilise it and ensure liquidity in the market. We will always welcome long-term investors into our bond market and we must ensure that they are protected by stabilising our currency so that they can make profits.” In fact, residents with domestic ringgit borrowing were free to invest in foreign currency assets, both onshore and abroad, up to the prudential limit of RM50mil for corporates and RM1mil for individuals. Does not really sound like capital control… right? The next sentence showed by he is the governor and none of us are. He said, “We must not be fixated on any particular levels (of the ringgit). Once we have realigned the demand and supply for it be dictated by actual demand for the currency that is where the ringgit will stabilise. The key point is that ringgit must stabilise because it will let businesses to make the right decision.”
I personally believe ringgit will recover because exports are still growing. The current trade surpluses every month also meant that the ringgit would be in demand when the exporters convert their proceeds back into ringgit. Of course, I still hope Trump would carry out all his policies so that the Federal Reserve (Fed) can increase the interest rates and perhaps make ‘America great again.’ Oh yeah, if the Fed kept raising rates, I think most emerging countries’ currencies would suffer. Yeah, every time Fed is about to raise rates, the economies of all these countries would start becoming bad. Haha. Happy reading yeah fellow Malaysians.
written on 13 Jan 2017
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