4th February 2015. Ringgit is up, well not just up. It has hit a three-week high. Okay, first of all this may mean nothing more than a one off gain due to the rebound in oil price as well as the rebounding stock market. Ringgit managed to claw its way up to RM3.5610 against the US Dollar from RM3.62 to 1 US Dollar last Friday. Can this last? Stop joking. As long as the overall sentiment remain negative on this side versus the US economy on the other side, of course this may not last. Oh yeah, reports after reports have been repeating the few words, ‘Ringgit is the second-worst performing Asian currency in 2015’. A reader said this yesterday, ‘If the Malaysian economy is doing well, then the RM should be going back to the RM3.20 to 1 US Dollar level.’ My reply, ‘No matter what the government or Bank Negara Malaysia does today, the sentiment will remain negative. Just have to let the market run its course. If we are fundamentally weak, the Ringgit will decline further, not keep its current level’.
Ringgit is also higher against the Singapore dollar, against the Yen, against the British Pound and even the Euro when compared to the last closing last Friday. Of course do not read too much into this. It does not mean all the other economies are doing worse than us. It meant only that for this one particular day, Ringgit happened to be looked upon as ‘better’ than them. Fundamentally, nothing has changed during the weekend holidays. One friend also posted something which was even supported by an online article. It said that currencies will decline because of the level of corruption in a country. Bad news is I think the level of corruption in Singapore is getting worse since it is depreciating too. The level of corruption in US meanwhile has declined so much that its currency is increasing and the level of corruption in Malaysia was lowest just over a year ago when the currency was very strong. No comment on the level of corruption in Malaysia versus even countries like Singapore which is said to be almost corruption free. 🙂
I think readers would have noticed that I do not really care too much about all these negative news about Ringgit. I also do not take too seriously news about certain developers launching huge projects and thus we should buy its stocks. I also do not believe GST is the major cause for any slowdown in property transactions for 2015 or how much GST is going to affect the prices, whether up or down. I believe however that everyone should always read more, understand more and make a decision based on what we believe in. Even if the one leading us is not blind, more often than not, they have their own agenda which may not be what we really want. Just read what REHDA says versus what the HBA would say versus what the customs department said about GST to what your neighbour is saying about GST. Trust good judgement. If it’s wrong, then it’s our fault. Just have to take the blame and perhaps restart. I do not believe personally that Ringgit would strengthen too much in 2015. US economy is still doing fine and the oil price would remain volatile and likely to stay low. Supply is still above demand and there’s no way demand can suddenly increase within a few months time. Thus for oil prices to rise, it has to be with the help of speculators. Happy reading.
written on 4 Feb 2015
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