The ringgit has weakened to around 3.23 against the US dollar, confounding analysts’ earlier predictions that the ringgit would strengthen below 3.00 by year end.
Among the factors contributing to the weaker ringgit:
– concerns that investors will repatriate government debt maturing tomorrow.
– persistent fiscal deficit concerns
– concerns over structural weaknesses that have eroded the current account surplus. Moreover, 36 per cent of revenue is from petroleum, a depleting natural resource.
– debt-to-revenue ratio of 237 per cent in 2012, which “puts the sovereign at risk of an outlook downgrade”. This ratio puts Malaysia in the category of other heavily indebted nations.
It is all a far cry from analysts’ predictions before GE13 and immediately after that the ringgit would appreciate below 3.00 by the end of the year.
| Please help to support this blog if you can. Read the commenting guidlelines for this blog. |
Malaysia’s official debt figure has gone up 13% since 2009 and it did not include hidden debts… Bolehland is mired in financial quicksand if Najib does not cut wasteful expenditure (unnecessary expenditures such as in “Supplies and Services” which have increased drastically from RM23.8 billion in 2010 to RM33.7 billion in 2013) and reduce the deficit.
Ringgit depreciated further, to 3.25 vs USD.
Trust BN to bring it to 2.99 level as boasted by Bank Negara before GE13?
I have to postpone my US holiday trip, settle for Cuti Cuti Malaysia. Soon I have to settle for Pensonic instead of Panasonic.
Loke Min Xian
Can cuti cuti in penang wo witness new era of penang beverly views some said being the menifestation of “bingchui” syndrome ! Seeing is believing, don’t believe ask tunglang before he moves over to Belum resort (may be 5 years later as retirement ceiling now raised to 60).
I remember reading some articles/journals on inflation being a means for the government to tax the people indirectly. They (the government) would increase the amount of money in circulation (and more importantly in their possession by creating) an inflation and thereby reducing our puchasing power. This whole practice is just like cutting a cake into many smaller slices while maintaining that each slice as RM1 as before although the number of slices have increased (say from 10 to 20 slices).
Ed G
GST on the way post GE13. Now as i drink kopi-o i am already in the process of contributing to nation’s coffer.
GST ensure everyone pay tax so BR1M can sustain (left hand pocket to right hand pocket lah)
Hi everyone,
The feel good factor/scenario painted by UMNO Baru during the 13GE campaign period is a con job by … UMNO Baru’s … The people have been taken for a ride, and now foreign ratings agencies are now exposing the lies of UMNO Baru, with their statistics contrary to those propaganda-dised by UMNO Baru during the campaign!
tan
if u hav properties at tanjung bungah u may want to capitalise on the craze now and sell off at high price b4 bubbles burst (already bursting?). Then with profits earned can go for cheap sale units like moonlight bay when market too saturated later.
any such thoughts ?
Umno Baru is raising the issue of that controversial hari raya video clip by the malay dog trainer to deflect the attention of the rakyat away from the falling ringgit and the negative credit rating. This is the same modus operandi.
I think the government derives more than 50% of its revenue from crude oil.
Malaysia will go broke after the existing crude oil reserve is exhausted and no new reserve are found .
From what the government is doing or capable of doing from track record , there will not likely be other major replacement for crude oil income.
I have just crossed the causeway to JB with my SingDollar and got an exchange rate of 2.51 at the money changer for Ringgit. Imagine 1 Ringgit is less than 40 Singapore cents!
Those with good results but somehow could not be admitted to our IPTAs should take up Singapore scholarship/bursary to study in NUS or NTU. You can get a Singapore job and PR upon graduation, by then 1 SingDollar could worth RM3! Then you can come back to buy up Malaysian properties with ease!
Many Malaysians who went to work in Singapore 25-30 years ago would be in retirement age now. They are likely be PR to own HDB flat in Singapore. If they cash out their Singapore home (property in Singapore at all time high now) and bring back their Singapore dollars to retire in Malaysia, they could deserve any fancy-sounding condo (eg. Beverly) in Penang to retire comfortably without any need for BR1M!
KL Soo
The morals of your story is we should encourage our young children to seek greener pastures elsewhere; and bring back money to care for their elders like giving them homes like that Beverly … etc.
Also, they remember to come home for GE14.
No wonder now street food biz up the menu prices as such “foreigners with local ICs” can afford to pay RM9 for a plate of Char Kway Teow without sweating.
SingDollar so strong (because of weak Ringgit) means fewer middle-income Malaysians would dare to venture into Singapore for Universal Studio, but have to settle for LEGOLAND or Hello Kitty theme park in JB!
Maybe have to wait 2 years for the new 21st Century Fox theme park at Genting?
Hopefully inflation will not jack up the admission fee?
Today stock dropped almost 20 pts. Is it the beginning of the worst to come. Now I will need that 1200 but I know it will not come. Maybe have to wait another 4 1/2 from now. Could GK tell me pls
The Edge Review on 23 July reported that 1MDB is a potential time bomb for the Malaysian government as it has accumulated a debt of RM38 billion in 4 years!
Read it here:
http://www.theedgemalaysia.com/business-news/247227-1mdb-a-potential-time-bomb-magazine-reports.html
Yang & GK
II think at 1400 pts can go in after “blue ocean chips” stocks ?
It could happen by next year i think if more ratings on the way with our spent spent spent fiscal policies.
Under Mahathir-nomics, uncontrolled spending on mega-projects by our government exposed our currency to external attacks which ultimately fall from RM2.50/USD to above RM4.00/USD before settling at a pegged value of RM3.80 through a currency control system. Badawi managed to introduce some form of fiscal discipline for a short period of time as well as partially freeing our currency and managed to improve the exchange rate to RM3.00/USD. Now Najib has thrown all fiscal prudence out of the window thus putting severe pressure onto our currency again. Are we in for another financial crisis in the near future?
According to apanama dia, someone was going to sell us to foreigners. Now we can see all those countries who took their medicine are so far ahead of us.
Economics didn’t apply to us in the nineties. Don’t worry, we are immune to everything, thanks to apanama dia.
Escalation of Barang Naik phenomenon ?!!! Today I went to buy a pair Asadi slippers at wet market (not at hypermarket) and it costs me Rm12/pair ! The shoes 100% made of rubber of Msia yet I can’t get it for below RM10 ! RM10 now is just like RM10 of yesteryears ! If local product is so high in price, what about imported ones like Adidas/Nike when ringgit fares so poorly in exchange value ? End of last year i read finance section of mainstream papers like The Star saying ringgit vs us$ is 1US$ is to be well… Read more »
This is only the beginning of the fall of Malaysia, Anil, in fact the ringgit will one day soon be a pariah currency of the world. For that reason, … the Umno rapscallions are keeping their ill gotten fortunes abroad. A good example is the immigration official who has an account in Thailand with a balance of over nine million dollars. The list of the hidden wealths abroad can go for miles and the only way for these to continue to grow is for all the coalition partners that are keeping Umno as tenants of Putrajaya is not to remain… Read more »
The instant noodle syndrome.
If Najib Razak can pass himself off as finance minister, I’ll apply to be the next Archbishop of Canterbury.
http://www.themalaysianinsider.com/malaysia/article/fitch-pushes-malaysias-credit-rating-outlook-to-negative
Key points: Global ratings agency Fitch Ratings has revised Malaysia’s sovereign credit rating outlook from stable to negative as the possibility of addressing public finance weaknesses has deteriorated after Election 2013. The news comes as the Malaysian ringgit slid to three-year lows against the US dollar and 15-year lows against the Singapore dollar, making imports more expensive while exports would be cheaper although exports have slipped. The general government budget deficit widened to 4.7% of GDP in 2012 from 3.8% in 2011, led by a 19% rise in spending on public wages in a pre-election year. It would be difficult… Read more »
If borrowing cost is going up, that means interest rate will go up too.
Good news for retirees who are relying on passive income from interests of their savings. tough luck for those who took loan to finance their dream houses/cars.