Ohhh ya...1mdb, gov guaranteed debt. Anyway, your first post, Rm 856B of gross external debt really scare ppl into thinking malaysia gov in such a big shit owing so much money....not good. Perhaps can find data for the breakdown of the external debt to better understand the whole issue.
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Exchange Rates for RM
- Thread starter crystal_tiong
- Start date
Ohhh ya...1mdb, gov guaranteed debt. Anyway, your first post, Rm 856B of gross external debt really scare ppl into thinking malaysia gov in such a big shit owing so much money....not good. Perhaps can find data for the breakdown of the external debt to better understand the whole issue.
The highest I changed was RM 3.095.. Last year this time vs now I save easily RM 2000-RM 5000. How I wish I can change daily!
The jam in Tuas was horrible yesterday. Horrible jams start at 2pm heading into JB and the Checkpoint had to deployed 2 poor chaps to man the traffic 5km away from Custom because there were tooo many Q-cutters. End up it took my colleague 2 hours + RM 20 VEP just to enter JB for a 2 hour massage + car polishing and seafood dinner. Well obviously he and thousands of others struck in the jam think its worth it to pay RM 20
Sat morning the jam start at 6am. Despite opening 100% of the counters, the jams is still rather obvious.
The jam in Tuas was horrible yesterday. Horrible jams start at 2pm heading into JB and the Checkpoint had to deployed 2 poor chaps to man the traffic 5km away from Custom because there were tooo many Q-cutters. End up it took my colleague 2 hours + RM 20 VEP just to enter JB for a 2 hour massage + car polishing and seafood dinner. Well obviously he and thousands of others struck in the jam think its worth it to pay RM 20
Sat morning the jam start at 6am. Despite opening 100% of the counters, the jams is still rather obvious.
Actually it is this Bloomberg report on MY that is alarming, showing how vulnerable the RM is right now.
http://www.bloomberg.com/news/artic...reserve-checkup-two-countries-come-out-on-top
All the ingredients are already in place just waiting for arrival of the perfect storm -
Extremely low Federal Foreign Reserves of only RM407 billions (US$98.3 billions)
Extremely high External Debt of RM856 billions
Low oil, gas and palm oil prices
Cancellation of TTP and Trump's pro US policies
Exodus of Foreign Funds from stock and bond markets
1MDB scandal international investigations including in SG.
Political instability
Start of SG school holidays??
Actually i find those factors are just bullshit. Just say FED going to raise rate, gaodim liao, no need to see what and what indicator. If malaysia gov do not try to uphold ringgit using up the foreign reserve, then weaker ringgit couple with strong export sector is a perfect ingredient to boost more foreign reserve. Looking at foreign reserve do not telling much, they have used up a lot last year to fight against weakening rm in futile, also malaysia built up a lot of foreign reserve lately. And what do you mean by "low foreign reserve"? Standing on what point to say so? Coz your previous comment doesnt seem you quite understand the purpose of foreign reserve, like the country can suka suka use it to pay down debt liddat.
First, I need to correct you on your "Malaysia built up a lot of foreign reserved lately".
You are totally wrong, the Foreign Reserves had been shrinking rapidly, from almost US$160 billions in 2012 to US$98 billions now, almost half gone!!!!
Take a look at this chart here :
Actually it wasn't me who said those things, it was from the article written by two experts from Bloomberg.
In that article, they had shown with illustrations and identified 3 countries with lower than adequate Foreign Reserves - Malaysia, Turkey and South Africa who's currency is most vulnerable to attack.
They said : "While most emerging markets may come under the same selling pressures, those with weaker reserve buffers are likely to do worse.", referring to the 3 countries mentioned.
They also said : “Malaysia and Turkey are classic example of countries whose reserve levels are falling to a critical level in comparison with the amount of their short-term external debt,”
The conclusion is : Currencies of countries that have plenty of reserves will probably perform better than others
http://www.bloomberg.com/news/artic...reserve-checkup-two-countries-come-out-on-top
Haha, dont want to explain to me, just use others ppl saying to prove your point. Well, your conclusion is true, but do you know how it work? You were showing the chart, let me explain why i said last year they use up a lot of their reserve to combat against weakening ringgit....they did not use it to pay down their debt, nor anything to do with 1mdb (i remember i read it somewhere you got this wrong concept of reserve falling bcoz of 1mdb).
First you need to know default risk. Malaysia gov have very low foreign currency denominated debt, even they have a lot, they will only use it when default risk arise i.e. cant pay debt interest, they will then only tap their reserve to pay. If not, most of the time the reserve will be there to accumulate.
Secondly, the way they use the reserve, like many other countries, is rather easy...buy up the local currency. Last year when ringgit drop bad bad, they use up the reserve to alleviate the weakness. So you can see the dramatic drop in reserve, using money always very quick right. But really fruitless effort.
Why no effect? Because forex market is way way bigger....big player like central bank, government can only exert certain effect. If others player do not agree with their ringgit weakness assessment, big player will only waste their reserve and not seeing the exchange rate improve much.
Thirdly, is malaysia reserve increasing faster than usual? Thereotically yes, n if i rmb correctly, not long ago also got report say that malaysia reserve increasr faster than usual...why? Bcoz weakening ringgit make malaysia able to export more, widening trade surplus...in effect making malaysia reserve increase faster than usual. So weak ringgit exhange rate is beneficial for export which in turn allow increase of reserve much more faster.
So all the while you keep quoting external debt...and reserve. Those 2 quite unrelated thing to prove your point malaysia is in deep shit. Let me tell you, ringgit has more to do with 1. Confident (including political confidence) 2. Oil price 3. FED rate policy (not so much on BNM since their policy is quite constant). These 3 factors exert more effect compare to other indicators.
Reserve, external debt etc...as long as the country economy fundamental is ok, those are not something need to be worry about.
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Bloomberg is a reliable international news agency and should be unbiased in their reports.
I cannot write as good as those journalists so it is better to quote them than to explain the same thing, this way also more 够力, and I also cannot explain as detailed too.
And to explain in details may need to spend a few days in front of you.
A country's Foreign Reserves is very important and the last Asia Financial Crisis is a classic case history for reference.
"weakening ringgit make MY able to export more, widening trade surplus...in effect making MY reserve increase faster than usual. So weak RM exhange rate is beneficial for export which in turn allow increase of reserve much more faster."
Your economy "theory" and is not workable because you missed out a most important factor.
The main export commodities for MY is oil & gas and palm oil and also the country's major revenue source.
Unfortunately, the prices of all these commodities had fallen by as much as 70% in the last few years.
And as a commodity, you cannot export more than the global demand and more export only drives the prices down further. Fine example is OPEC's refusal to cut production causing the oil price to remain low - supply more than demand!
So, for MY, although export quantity is not affected but the value of export had gone down by more than half - you sell the same amount but got paid less than half.
Malaysia had been running on a deficit National Budget for a long time now - spending more than they could earn for the whole decade!!!!
And because the govt cannot work on a balanced Budget, their Foreign Reserves had been shrinking yearly to the present US$98 billions.
Another worrying factor is the high Gross External Debt.
Out of the RM865 billions, the realized Federal Debt is RM678 billions, many were derived from foreign borrowings and bonds sales. (If MY decides to build the HSR, please add another RM70 billions to the Debt.)
With Bonds interest rates averaging about 2.5% , RM678 billions would means an annual payout of RM17 billions just to service the loans.
Having high debt is not always a problem for some countries but its the ability to service the debts and ultimately repaying the loan.
The full transparency of the various GLCs is also another issue in MY.
When the Swiss were investigating the 1MDB case, they discovered a Ponzi Scheme!
1MDB took a loans from Lembaga Tabung Haji and KWAP, a retirement fund for about RM6.5 billions and were till now not accounted for which means the actual Gross Debts could be even much higher!
Taking an overview at this whole mess, it seems like money were taken from A and B to put into C's account to make C looks good............a Ponzi Scheme as discovered by the Swiss?
You know how Greece went bankrupt?
All the things happening in MY now happened in Greece.
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CIMB transfer exchange rate is 3.1093 today (28 Nov 2016 @ 12noon)
Reuters RM$3.1315
Weakening by the day.
Weakening by the day.
We left Bukit Indah at 11pm. Reach Singapore house at 4am.
Apparently at 3 and 4am the Tuas 2nd link is fully jammed.. since 7pm the night before. Fully congested
5 hours jam!
Frist time in history!!!
Any specific reason for the situation?
With the RM sliding down so fast, all rich Malaysians are probably hedging by converting to US$ or S$ so how can the RM still remain stable?
Very obvious why the Grand mum of all jams are here.. worse than long weekends. Its RM 3.11 that is the main draw.
Those who claim RM 20 VEP has turned off Sinkie from entering Malaysia to spend money like a king will be very very disappointed. We have experienced jams past few days which has never been seen in decades. The actual jam starts at the Shell station just 500m from the Toll! OMG! And it took us 2-3 hours to clear Malaysia side. I have never seen anything like that even during long weekends. There were easily 15-20 lanes of cars squeezing with one another. Cars broke down.. tempers fray and kids crying and people were frustrated. knock here and there is quite common.
RM 20 has done no difference at all! RM 50 I say pls
Those who claim RM 20 VEP has turned off Sinkie from entering Malaysia to spend money like a king will be very very disappointed. We have experienced jams past few days which has never been seen in decades. The actual jam starts at the Shell station just 500m from the Toll! OMG! And it took us 2-3 hours to clear Malaysia side. I have never seen anything like that even during long weekends. There were easily 15-20 lanes of cars squeezing with one another. Cars broke down.. tempers fray and kids crying and people were frustrated. knock here and there is quite common.
RM 20 has done no difference at all! RM 50 I say pls
8 out of 10 Malaysians or Sinkies who stayed in JB took leave in my company today. All reached home 3-5 am.. no energy to get up at 7am to work.
But do you notice that the jam is from JB to SG?
People are rushing into SG to convert their RM to S$ or other foreign currencies before it falls further?
According to the Global Wealth Report, Malaysians' wealth dropped 7.2% in 2016!
The report also states that the total household wealth in Malaysia has dropped US$26 billion or 5.2%.
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You mean that's no money changer in JB or Malaysia? Hmm.. and they come into Singapore to change from 12am to 4am?
Something must be wrong.
anyway, in the jam 80% are Singapore cars returning home ya
Something must be wrong.
anyway, in the jam 80% are Singapore cars returning home ya
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