Please don’t waste our forex to “stabilise” ringgit, Bank Negara Malaysia
YESTERDAY (July 26), the ringgit touched a low of RM4.46 to the greenback. Going at this pace, some folks say we may reach RM5 to the US dollar come end-August.
To the Makcik (aunty) in Bank Negara Malaysia (BNM), please do not waste our foreign reserves to help stabilise or strengthen the ringgit. You will be burning our forex resources with no positive returns.
The ringgit is depreciating against the US dollar which also faces risks of its own. This is a double whammy. Plus oil prices are still high – although they are dropping a little (US$96/barrel for the West Texas Intermediate).
This time I don’t see a stop to the slide in the ringgit. If it reaches RM5 to the US dollar, then it can go beyond that as well.
Just as much as we are an exporting nation, Malaysia is also a huge importing nation. All the costs of imports will go up. Then prices of things sold inside the country will also go up. This is called imported inflation.
One way to mitigate this is to buy more stuff from countries whose currencies have depreciated more than our ringgit. Turkey’s lira for example has crashed even more. Maybe we can import Turkish Delights and that Bayraktar missile shooting drones.
Is there hope?
Like the rest of the country, our economy is in serious trouble. The fools do not know that. Not only do they not know that but they do not know that they do not know.
They really think that they are on the correct path. And if they fail, well it is because of conspiracies – Chin Peng, Zionists, the West, Christians, the local Chinese, the DAP, orang tengah (middlemen who are also the Chinese) – to destroy our precious economy.
So by conspiring to destroy our economy, the Chinese (for example) plan to become even richer! So by conspiring to destroy Islam and Muslims, the West (for example) which sells so much goods and services to Muslim countries, plans to become even richer!
You become richer by destroying the markets that buy your goods and services? This is auta(fake) economic theory again.
To all right thinking people here is my advice. Preserve and conserve.
Preserve your skill sets – whatever they are. And improve on your skill sets. Conserve your expenditure. Hold on to good assets like property and gold. If you invest in shares, look at foreign economies like China and Vietnam which are stable.
Some foreign currencies are stable like the Singapore dollar and the yuan. I don’t know about the US dollar.
Don’t worry about gold. No matter what the price of gold (up or down) don’t worry. Gold is not only a store of value but it “captures” value very well.
If the price of gold goes up, most likely the prices of all other things will also go up. If gold price goes down, the prices of other things will likely go down as well.
Our country is certainly on its way down. But the fixes required are so easy and simple. I have said this many times before – it is so easy to fix all our problems. But sadly, we may have to crash first before we get back on our feet. – July 27, 2022
Syed Akbar Ali who blogs OutSyed The Box was a former member of the Malaysian Anti-Corruption Commission’s (MACC) Panel on Consultation and Prevention of Corruption member.
Source: Focus Malaysia
