So the Prime Minister/Finance Minister/Chairman of the Board of Advisors of 1MDB has done it!. The ringgit has sunk beyond the psychological mark of 4.00 against the US dollar, a slump to levels not seen since the Asian Financial Crisis in 1997-98.
It is light years away from the exchange rate of RM2.10 to US$1.00 in October 1978 during Honest Hussein Onn’s tenure, three years before Mahathir came to power. A time when financial scandals were few and far between.
The prospects look grim with numerous factors needing resolution:
- questions surrounding the 1MDB and RM2.6bn probe remain hanging in the air
- US rates set to rise
- the China economy rapidly slowing after the huge bubbles there (What will happen to the property market here now?)
- a slump in commodity prices, which will hurt smallholders and workers
- corruption in Malaysia bleeding the economy
- high household debt is burdening the rakyat and have led to slack demand in the retail economic sector.
- neoliberal policies (especially privatisation and now GST) have led to wide income inequalities. One Khazanah Research Institute economist demonstrated the extent of this inequality: ““Car sales in Malaysia are down but for Porsche it is up by 180%. Proton is down 22% and Naza down by 100%, but for Mercedes it is up 44%. The high end cars are selling like hot cakes and the lower end is dropping. The rich are ok. The low (income) have a problem.”
- confidence in the Najib administration’s stewardship of the economy is at a low ebb resulting in many turning to foreign currencies
- the poor education system has resulted in tens of thousands of unemployed/unemployable graduates and diploma holders.
- the brain drain has been aggravated by discriminatory policies
- local wages are being suppressed by an overreliance on cheap – and easily exploited – migrant labour.
The Najib adminstration has even “surpassed” the expectations of the bullish economists at RAM.TheSun reported just a week ago, on 5 August, when the ringgit was trading at 3.85 to the dollar:
RAM: Ringgit won’t hit 4.00 against US$
RAM Rating Services Bhd economist and head of research Kristina Fong is of the view that the ringgit to continue experiencing volatility in the next few months in anticipation of the first US rate hike, but the currency is not expected to hit the 4.0 mark against the US dollar.
Speaking to reporters after a talk titled “Economic Outlook and The Impact of Exchange Rate Volatility” organised by the Malaysia External Trade Development Corp (Matrade), she said RAM is projecting the ringgit to be in the range of 3.8 to 3.9 in the next few months.
“We don’t expect the ringgit to touch 4.0, 3.9 will be the lowest,” she opined, adding that the full-year average forecast for the ringgit is 3.7 to 3.8.
The weakening ringgit is going to lead to imported inflation. It will hurt those who buy foreign goods (or goods with imported components) and services (eg an overseas education).
This crisis appears to be beyond the present administration’s ability to overcome. In fact, it is being aggravated by the administration’s various scandals and a distinct lack of trust and confidence in its stewardship.
Don’t you think it is about time Najib goes on leave pending the outcome of the 1MDB probe and we ensure we never again have the same person as both prime minister and finance minister.
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What is the “brain drain” we keep hearing about that impacts so badly on Malaysia’s economy? If there is a brain drain then it is an admission that those who remain are simply not the best. In short the no brainers!! and that is easy to accept considering the quality of argument here surrounding the fall of the ringit. It is certainly no erudite piece of scholarship but the usual dung heap that comes from the brains that have not yet been drained (and perhaps never ever will). The Australian dollar is now 30% down against most major currencies especially… Read more »
1 USD now cost us at least RM4.11!
Wonder whose turn is it now for some “dunggu” minister to announce “Pantau Harga Barangan” or to Survey & Control Cost of Goods
We can expect the cost/price rise for dairy products, baby formula/food,
farming & industrial related parts and even toothpaste.
It is now getting difficult to change your ringgit to foreign currencies.
The BN govt is no longer “singing” that their GST will bring down certain prices.
Irrespective of long term or short term effect, the govt (&state govt)must have plans to draw in hard cold foreign currencies.
Zahid Hamidi today revealed there was an effort to get MPs in BN and the opposition to sign a statutory declaration to support a new replacement for Najib. He described this as an attempt to “topple the government through the backdoor” and claimed that it was being spearheaded by a leader within Najib’s own party. If the Perak coup method is adopted against Najib, the anti-Najib forces will need only a simple majority of MPs in the 222-member Parliament to sign a statutory declaration declaring their support for a new prime minister. This will then be presented to the Yang… Read more »
Dream on
Foreign investors continue their sell down and exit the Bursa KL for almost 4 months now and billions had exited. How can the RM and KLCI sustained with money flowing out? BNM cannot continue to mop up the RM as its reserves are falling, it’s now below USD 100 bil ! The next Fitch rating for Malaysia will be downgraded and this makes the country’s economy even more difficult position. We got a bunch of clowns sitting in the cabinet with concerns on holding onto power and the economy becomes secondary !!! Congrats to those who voted them in …..… Read more »
MCA’s Gan Ping Sieu is mocking Liow Tiong Lai for remaining mum on 1MDB and the donation issue, saying that MCA risks losing all moral legitimacy in the eyes of public.
Gan Ping Sieu is just a voice in the wilderness having lost Kluang to DAP’s Liew Chin Tong.
Deputy Minister Chong Sin Woon aka MCA Youth leader is quick on the draw to condemn DAP leaders but has maintained his elegant silence on 1MDB, possibly to safeguard his new position.
Wee Kar Siong has claimed he knew nothing as he did not attend cabinet meeting and PM did not brief MCA.
Chew Mei Fun can learn from Langkawi Umno delegate Anina “kencing” Saadudin.
Anil should post this ‘Terima Kasih’ music video (from 2012 1Malaysia campaign) and let us see how things have changed.
https://m.youtube.com/watch?v=I-k2qoVzhtQ
I think a akin is well past his expiry date. Terima Kasih, KLCI dropped below 1600 mark.
Zeti rules out return to 1998 ringgit/USD peg
http://www.freemalaysiatoday.com/category/nation/2015/08/13/zeti-rules-out-return-to-1998-ringgitusd-peg/
If Bank Negara Governor Zeti & the govt have the courage to rule out pegging our Ringgit, it PROVE once and for all that our country FUNDAMENTALS ARE STRONG and that we can withstand whatever pressure there is from the dollar.
AND IT WILL PROVE ONE MORE THING. NAJIB & BN IS HERE TO STAY
Zeti does not have the means to peg Ringgit because our International reserves has fallen greatly to US$96.7bil, of which the foreign currency reserves are at US$88.7bil.
Also 40% of the ringgit-denominated bonds (amounting to RM206.8bil) are held by foreigners. Any tinkering of the foreign exchange rules at the moment will cause a significant outflow.
You also admantly say pas without bn take over the selangor gomen in august.
During Badawi’s reign, I was hoping for the MYR to go back to the pre 1997/98 financial crisis rate of RM2.50 per USD. Now, I am only hoping that it will return to RM 3.10 – 3.20 per USD of pre Najib’s reign as I have to come to terms that the glorious rate of RM 2.50 per USD will never return until and unless fiscal prudence is stringently enforced. But this is next to impossible under the current system of patronage, power abuse and opaqueness. So by the modest expectation, I am taking the RM 3.10 – 3.20 as… Read more »
Are you still drunk? Ying is different from yang!
Malaysia is in the ying right now.
We can yang and yang and yang but this country will go down the ying path.
You are right the Ying way which is why Cat senior now loved M and UMNO so much
The emergence of UNQUALIFIED “instant” economic experts on social media, who have linked the fall of the national currency with the current political situation, has RAISED MUCH CONCERN among the people, according to an academician. “Nowadays there are many economic experts, SPREADING ANXIETY regarding the fall of the currency NOT BASED ON FACTS, but relate it to national politics. http://www.malaysia-today.net/ringgit-down-amid-fears-raised-by-instant-experts/ BELIEVE IN DAP, PKR & PASAR MALAM (pasma) and those NGO including the not so Bersih, YOU CAN BE SURE OUR COUNTRY WILL REALLY GO BANKRUPT. Remember when ANWAR (PKR) was Finance Minister in 1998, the RINGGIT SLUMPED TO RM… Read more »
1997 crisis, bn gomen fact for the devalutation of the ringgit is jewish conspiracy – GEORGE SOROS. Now BN blurr2. E=mc2
Scandals surrounding Prime Minister Najib Razak’s administration and its undemocratic efforts to contain the damage have cost Malaysia its reputation as an investment haven, according to an article on the Global Risk Insights (GRI) website. It said the scandals, mostly arising from questions about 1MDB’s integrity, had distracted the government from dealing with economic issues such as the effect that falling oil prices would have on government debt. The article quotes a law professor in Singapore as saying that Najib’s decision to fill his Cabinet with loyalists would, in the long term, “raise concerns about political stability in Malaysia.” GRI… Read more »
Thank you Benny to provide a more balanced view, although I hope Malaysia is in good financial position I do not believe in the lies of mainstream media.
A responsible and competent PM would had allowed all those tasked to carry out the investigation on the 1MDB and its alleged irregularities to do their job without fear or favour while he perform his duties as the head of government of the country. Besides, a clean and untainted leader without any baggage would not have to worry about all the queries thrown at him as he could just allow those tasked with the investigation to provide reasonable answers to the queries besides making public their findings from time to time. In addition, all the detractors and whistleblowers should be… Read more »
Just came back from Lorong Kulit. Saw a Pasar Malam (Pasma) banner hung over there.
Pasar makan a malaysian culture and an attraction to international tourist. Bet. thank god, it is gst free and patronise it often unless those who are bn crony enriched.
You have been posting nonsense. Please use proper English.
Anil should ensure that proper English is used, so as not to badly influence young readers.
My English or the English in the comments? 😉
Read the words of EXPERTS who are not POLITICALLY MOTIVATED Ringgit weakness is temporary, says experts The weakness of the ringgit, mainly attributed to low commodity prices and a slowdown in China’s economy, is temporary, say experts. Inter-Pacific Research Sdn Bhd Head of Research Pong Teng Siew said Malaysia was dependent on commodities, including crude oil and the sharp decline in prices would eventually have an impact on the government’s revenue, thus pushing investors to take a cautious stance. People are so quick to compare the current decline in the ringgit to that of the 1997/98 financial crisis, but they… Read more »
Actually ITS NOT TRUE ITS TEMPORARY.. It all depends. While its possible for the MYR to rebound after the US stops raising interest rate and China stop devaluing, IF before they do that they print money to try and boost the economy again, then any gain after US and China stablize will also go back again… It was always going to get back to 3.8 or worst given that Najib kept printing and spending money when times were good..
The Ringgit is performing even worse than Thailand and Indonesia. This means every Malaysian’s wealth has been reduced by 20%. Malaysia’s Consumer Price Index (CPI) in June rose 2.5% from last year on higher food prices, following a gradual acceleration from April due to GST, Malaysian households will suffer a loss of purchasing power and that healthcare will likely become more expensive since medical products are mostly imported. All financial reports previously produced by Bank Negara and the Malaysia Productivity Corporation, including 11MP, are now irrelevant due to the difference in the currency rates used for projections. Penang may have… Read more »
Only a BIG LIAR without blinking an eye would say our ringgit is performing worse than Indonesia Rupiah. As for Thai baht is slightly better than us down 10% comapre to our about 12%.
Are you doubting the latest report by The Star?
Refer to the chart of ‘Performance of currencies vs USD:
http://www.thestar.com.my/News/Nation/2015/08/13/Ringgit-falls-to-a-new-low-Currency-weakens-past-RM4-to-US-dollar-largely-due-to-yuan-devaluation/
On a year-to-date basis, the ringgit is the worst performer among its Asian peers, and is down 13.33%. This is followed by the Indonesian rupiah, South Korean won and Thai baht at 9.88%, 8.35% and 6.99%, respectively.
malaya is a big brother country to sinkapore. Since the separation, malaysia a much bigger country has become lower to sinkapore and best in comparing to basok and tom yam. Bn gomen chased penangites and other malaysian talents to the little red dot. No one wants to compare bn gomen to the red dot.
Benny, Quote ” The Ringgit is performing even worse than Thailand and Indonesia. This means every Malaysian’s wealth has been reduced by 20%. You and the CAT did not say on a year to year basis. The Star said on a year to year basis BUT prior to this year to year basis the Rupiah has ALREADY LOST 40% while our currency did not lose much or were still INTACT during that period. Couple with this year to year 10.23%, the Rupiah has LOST almost 51% which I have commented 12 Aug 2015 at 11.30am The ringgit throughout all these… Read more »
That idiot ktemoc says he hailed from Ayer Itam kampung area
JAKARTA (Reuters) – Indonesian president Joko Widodo replaced key economic ministers as part of a wider cabinet reshuffle on Wednesday, less than a year after taking office.
http://www.thestar.com.my/News/World/2015/08/12/Indonesian-president-set-to-reshuffle-cabinet/
This article by Kua Kia Soong, SUARAM Adviser to what DAP stand for is very clear and concise http://www.malaysia-today.net/oppositions-30-year-engagement-with-pas-undone/ We used to have to be saved from Mahathir. Now we are told we need to ally with Mahathir to save Malaysia? The disbanding of Pakatan Rakyat on 16 June 2015 after the DAP declared it could no longer work with PAS is a sad day for all Malaysians who have hopes for a viable alternative to the Barisan Nasional. The DAP is now willing and able to work with the man who has been responsible for privatising practically all of… Read more »
It is just a ploy to jolt UMNO.
Why are you so disturbed?
Maybe you have no God to turn to for solace?
You can ask tunglang for spiritual reference.
Save by Madhater huh? Wait till you meet that Anil’s good friend, ktemoc. Hahahaha
Try to be igp. Please use the proper channel. Or like our elected pm. Give us the answer and not something else as what happened to our ringgit??
All he will do is have Idris Jala massage GDP figure that uses a better exchange rate and say Ringgit is Oversold…(?)
We have big countries exporting deflation trying to inflate their own.. If Najib is stupid enough to try and compete to inflate too, RM4 will look like ‘strong’ soon..
Our economy was good in the last few years due to the inflow of hot money of USD printed in the QE era when the interest rate in US was almost zero. Not so much of BN’s effort.
Now the money is flowing back, out of Bolehland. Will Bank Negara raise OPR to curb outflow? Those taking loans will be worried.
I hope BN ministers can stop syiok sendiri by keep telling us that lower Ringgit will help our exports.
Actually, our government leaders welcomed the speculative inflow into the property market by foreigners following QE. They could have imposed tighter controls to prevent speculation but they didn’t.
I have always said we are not alone but opposition and their supporters are always being in a state of denials and obsession. A clear & concise information by Goh Wei Liang http://www.freemalaysiatoday.com/category/opinion/2015/08/12/are-malaysians-now-currency-experts/ The past month, opposition and their supporters have become constitutional experts, aviation analysts and now to authorities on economics. Look at how currencies depreciate against the US dollars. • Russian Roubles lost 114% against USD • Indonesian Rupiah lost 51% against USD • Indian Rupees lost 38% against USD • Norwegian Krone lost 37% against USD • Australian Dollars lost 24% against USD • Euro lost 20%… Read more »
Our official minimum wage is RM900, and even so some are still earning below RM900.
Officially it’s RM900 but most won’t be working for that. Employers are now paying at least RM 1,200 and even that most would not be much interested with the exception of foreigners
I know a couple of cleaners (both local and migrant) who are getting paid just RM700 by their cleaning contractor boss.
Soon they would have to compete for such jobs as BN is importing more Banglas, with or without the help of Zahid’s brother.
Where to get RM3.50 mee now?
A lot of placed
With small portion
Singapore’s jobs with min wage are mostly jobs done by foreign workers (who find them lucrative by their coubtry standards), or part time jobs at fast food joints for students to earn pocket money.
See what the response will be if you say “Don’t worry about falling ringgit” to
Parents with kids studying in USA
Bosses of Malaysian SMEs who have to import raw materials from foreign countries such
as USA or those in the EU
P.S. Please come to Kuala Lumpur and check the price of a plate of chicken rice or bowl of
curry mee. Perhaps you live in Cowboy Town, Malaysia where you can still get these for
RM3.50 to RM 4 ??
How much is a plate of chicken rice, noodles and char koay teow in KL now? Medium size plate or teeny weeny plate (which won’t be enough to satisfy most of you)?
The RM3.50 to RM4.00 is the price for crash diet-friendly portions.
Mr Anil,
Here are hawker food prices in KL suburbs:
Chicken rice RM5 to RM6 (harder and harder to find RM5 chicken rice these days)
Small bowl of curry mee RM 5.50, big bowl is RM6 to RM6.50
This is in Shah Alam and Bandar Sunway.
I think we should eat smaller portions, more times a day … hopefully they can charge cheaper for smaller portions, and I can settle the other meals with bread … my dietitian would be so proud of me!
Anil
Astro AEC Sunday nite a program whereby chicken rice at RM2.50, add 50 sen for more rice at BB kopitiam next to Suntec or Sunshine Square Bayan Baru.
To check it out but some say its promo during the show.
Otherwise check out RM2 local food at new food court opposite SPICE, drinks RM1 starting this week. A promotion tunglang should not miss as he can take bus 302 from Bukit Gambier to avoid traffic jam.
Bayan Baru Penang : You Yuan Fen Food Court opposite SPICE (formerly known as PISA during Gelakan era) over 10 local dishes at only RM2 per item from 15/8/2015 to 14/9/2015. Don’t believe can call first : 019-4180818
I am just doing public service to share good deals to save money
food include :
curry mee, fried rice, lam mee, hokkien mee, fried kway teow, taiwan kochabi mee, claypot mee.
for drinks just add RM1
This means one can survive RM6/day there !
MTUC is concerned that the continuos devaluation of the ringgit could result in the cost of living going up, and several MNCs are closing their factories here causing more unemployment.
Is this the next wave of hardship to ordinary rakyat after the GST tsunami in April?
Try eating Penang char kueh teow and a cup if Chinese tea in kl under bn admin?? Lucky u have dap admin in penang pokksi to have bn admin in kl.
Yang
Next time you are in Singapore, try the Chicken Rice at Rochor Centre (near the JB-Spore Express Bus station at Queen Street) that cost only S$2.30.
But if you get good donation with cash to spend, then try the chicken rice Chatterbox, Mandarin Orchard Hotel at S$32!
best time to roll out Gogo bar business license to tap tourist dollars.
As people need to work and to pay bills .
Nazri or ah yang a dunggu? Yang said other countries’ currency also goes down. So malaysia is not the real place for tourists. One tourists mentionrd it is too islamic snd bs to call it a truely asia
China devalued its currency by 2% that caused a ripple throughout most of Asia. Indonesia currency is 17 year low so is Japan & India.. Russia rouble down 45% and many European countries dropping up to 25%. Don’t be a dunggu. This is a world wide phenomenon affecting the world because of US speculation
Yes, China Central Bank has control over its Renminbi and devalued it 1.8% yesterday to boost the country export. Unlike Bank Negara who has lost control of course with its reserves going down with Ringgit. However, Umno’s owned NTV7 yesterday in its news tried too hard to defend Ringgit’s sharp decline by saying that US Dollar was too strong that it even caused Renminbi to drop almost 2%! I guess TV3 must have twisted issue even more. So, what can Zeti do tomorrow when she returns from her MIA stint? Reduce OPR/interest rate? This will cause more outflow of fund… Read more »
In the past, when my children came back from school with poor results…they will say:
1. Why worry dad when I obtained 223rd position in the whole form when we have Ali, Ah Kow, Ambiga who obtained lower positions than me?
2. Guess what is my answer?
Oh yes boys !!! You are fit for any minister’s job in the Malaysian cabinet !!!
Media Prima has fired its Chairman Johan Jaafar (JJ in this blog?) to get a new spin doctor?
Meanwhile Ku Seman in Utusan has ben questioning Najib lately.
All is not well in UMNO’s media?
Different camps due to internal conflict?
That is the most critical point: separate the Minister of Finance and the Prime Minister positions.
But it will only stop the rot if both positions are held by individuals who have high sense of integrity and duty to the people. The balance of the cabinet need to be robust and challenge the Prime Minister and Finance Minister to justify each programme that is presented to them.
Loyalty should be a word of honour. It should mean that each Minister is loyal to the truth and all else follows.
This current bunch……………………………………[email protected]#$%^&*()+}{:”><?
Najib’s 1mdb has become a worldly affair. Looks like this time it is not as easy to sweep things under the carpet.
For Anwar and Altantuya he can hide under the bench. Now, everyone is waiting for 1pm to sue the Wall Street Journal and Sarawak Report. Let’s see how it goes and meanwhile, more popcorns…
Now, i begin to see why the Almighty preserves Dr M’s dear life, so that he can witness
for himself how he ruins the nation, all for self enrichment.
Well done Malaysia under the rule of BN !!!
Yes, many had hoped that Mahathir would be around to witness the ultimate outcome of the policies he set into motion.
Lenin paved the way for Stalin, much to his regret.
Gelakan paves way for Gerakan Harapan Baru.
My respect to Dr Kim Chong Eu for bringing us FTZ, only for boh hoot to ruin by collaborating with yang tak bersih.
Everywhere business is slowing and shrinking and many small traders are crying foul over the country’s policies as well as blaming the PM.
The trend is in fact, very worrying now !
A friend is lamenting his electrical shop is doing badly; his house, owned by his blood and sweat is for sale now… Runtuh 1pm and strip GST right away… 1pm and his 1cabinet are living a … luxurious lives at our expense, and we, the rakyat are scrapping our periuk nasi, what a *** 1mdb govt !!! …!!!
JJ,
Now you are writing in Anil’s blog. Forsaking Anil’s good friend, ktemoc. I wonder why hor
My good friend?
Especially with gst