In addition to what has been discussed, Malaysia is working hard to reduce its fiscal deficit by removing fuel subsidies, patching all the tax loopholes via e-invoicing as a first step, and gaining a higher credit rating which also helps to strengthen the currency. Other than semi conductors, data centers are also being built with more demand for MYR in the future when it’s materialized. Keeping fingers crossed for a stronger MYR.
On Boon Tee's interpretation for Malaysian goods becoming more expensive among the competitions due to currency appreciation: actually most Malaysian exporters are still exporting with USD and EURO not with ringgit, hence it wouldn't become more expensive for the buyers. It would just hurt the profit margin of the exporters when they convert the currency back to ringgit *after* the trade.
no sg monetary policy is not to keep appreciating against all other currencies blindly. we have our own exports to consider too. it is to peg against a basket of currencies. then, depending on the circumstances, it will follow a band by which sgd it allowed to be stronger or weaker compared to this basket. for example recent times, to fight imported inflation, MAS allows the sgd to go a bit stronger relative to this basket of currencies. whatever it is, policy is not to keep appreciating
Boon Tee has explained the macro economics very well. Agree that it is too much to read into the short term interest rate differentials and the FX movements to attribute to Anwar's policies alone. I believe he is making the right changes for Malaysia to move forward to compete for labour and capital and make it better for Malaysians. But the bigger hurdles he faces are the political and the Elite ruling class of Malaysia that will determine whether he can succeed or not.
All of these foreign currencies are all very manipulating, if stronger currencies are always good. China will have boosted their currencies and like Japan which is forced to hike in the plaza accord.
In addition to what has been discussed, Malaysia is working hard to reduce its fiscal deficit by removing fuel subsidies, patching all the tax loopholes via e-invoicing as a first step, and gaining a higher credit rating which also helps to strengthen the currency. Other than semi conductors, data centers are also being built with more demand for MYR in the future when it’s materialized. Keeping fingers crossed for a stronger MYR.
On Boon Tee's interpretation for Malaysian goods becoming more expensive among the competitions due to currency appreciation: actually most Malaysian exporters are still exporting with USD and EURO not with ringgit, hence it wouldn't become more expensive for the buyers. It would just hurt the profit margin of the exporters when they convert the currency back to ringgit *after* the trade.
One overriding factor not considered is.....political stability and government.
no sg monetary policy is not to keep appreciating against all other currencies blindly. we have our own exports to consider too.
it is to peg against a basket of currencies. then, depending on the circumstances, it will follow a band by which sgd it allowed to be stronger or weaker compared to this basket. for example recent times, to fight imported inflation, MAS allows the sgd to go a bit stronger relative to this basket of currencies.
whatever it is, policy is not to keep appreciating
Well said.
Boon Tee has explained the macro economics very well. Agree that it is too much to read into the short term interest rate differentials and the FX movements to attribute to Anwar's policies alone. I believe he is making the right changes for Malaysia to move forward to compete for labour and capital and make it better for Malaysians. But the bigger hurdles he faces are the political and the Elite ruling class of Malaysia that will determine whether he can succeed or not.
All of these foreign currencies are all very manipulating, if stronger currencies are always good. China will have boosted their currencies and like Japan which is forced to hike in the plaza accord.