Professor Geoffrey Williams’ Post

MARC RESEARCH: Fluctuations in the Malaysian ringgit can arise from changes in the demand and supply of financial assets denominated in different currencies. Portfolio flows are often judged by their short-term nature, although their longer-term trends provide constructive structural implications. Since 2005, the foreign share of government bonds ranged from 4% to 36%, with the latest being 21% as at April 2024. At 21%, foreign holdings are near the long-term average, suggesting that foreign investors have retained their interest in Malaysian government bonds despite currency volatilities caused by pivotal shifts in global interest rates. While foreign holdings are below the 10-year average, there is no evidence of capital flight from Malaysia surpassing historical norms. For the full press announcement, please click here: https://lnkd.in/dT3T-dVJ #MARC #economicresearch #ringgit

The Ringgit’s rebound has been impressive as of the most drastic jump in nine years since 2015. Will this translate into improved living standards at lower costs? Oppotus’ upcoming Q2 Malaysian on Malaysia report (MOM) is coming soon to share the latest economic trends and others too. #marketresearch #economy #malaysia #oppotus https://lnkd.in/gYKqRf3x

The rising foreign investment in Malaysia is somewhat hopeful indicator for both ringgit and country’s long-term economic growth. I’m optimistic that this positive trend will continue and bring sustained prosperity. However there's still some unforeseeable global risks like shifts in U.S. leadership, ongoing conflicts in Ukraine and Gaza, and uncertainties surrounding China’s economy etc could influence Malaysia's economic stability. It is crucial to remain vigilant, but as usual 😃 We Malaysians are accustomed to sudden political and economic changes, much like the quick flips of roti canai, made us resilient and super strong-hearted 😉 #malaysiaeconomy #currentaffair

Great to hear from Carmelo Ferlito (Center for Market Education) at the BeLuxCham Malaysia & SWEDCHAM Malaysia (formerly MASBA)'s event "Economic Update, The Ringgit Performance and Monetary Policy in Support of Investment" Quoting Dr. Michael Sailer's summary of the event, here are some of Carmelo's points: Challenges: 📉 Throughout the past year, the Malaysian Ringgit encountered significant hurdles, marked by a decline against major currencies like the USD and SGD. 💼 Various foreign and domestic factors contributed to this depreciation, ranging from geopolitical uncertainties to higher inflation rates abroad and China's slow post-pandemic recovery. 📊 Malaysia's economic performance, impacted by global trade slowdowns and domestic policies, further compounded the strain on the Ringgit. Resolutions: 🔍 Carmelo Ferlito stressed the importance of adopting pro-market reforms and innovative strategies, such as encouraging currency competition within ASEAN, to tackle these challenges effectively. 📈 Short-to-medium-term stability could be achieved through proposals like Malaysia MySecond Home, labour liberalisation, and subsidy rationalisation, focusing on more ambitious strategies for long-term growth. 💼 Concerns arise over government-driven investment in Malaysia, highlighting the need to address resource misallocation and economic inefficiencies. 🌍 A collective call is made for ASEAN to promote free currency competition within the bloc. This would incentivise governments and central banks to promote responsible fiscal and monetary policies to ensure their currencies remain strong and attractive. Well organised, Karl Godderis and Dr. Jenny Jahanshahi Westin. #economy #fiscalpolicy #centralbank #malaysia #ringgit #chamberofcommerce #belgium #sweden #luxemburg

Fourth: Time for a New Foreign Exchange Regime, Malaysia! #Economics #finance #currencies #Fed #BNM #IMF #IBRD #EBRD #PBOC https://lnkd.in/gsWmdHTH

A potential solution or lesser evil? 🇨🇳 The Minister of Commerce sees promise in using the Renminbi (RMB) for trade with China, but in brief, what could this mean for business in Zambia? 1. Zambia's Current Economic Challenges: * Depreciating Zambian Kwacha: The Zambian Kwacha has been depreciating against the USD for several years now, making imports more expensive and contributing to inflation. * High Dependence on USD: Zambian businesses heavily rely on the USD for international trade (including China), exposing them to currency fluctuations and potentially higher transaction costs. (Import based economy and trade). 2. Minister’s Statement Immediate Analysis. ( Pros and cons): * Minister's Argument: Using RMB for trade with China (Zambia's biggest partner) could reduce transaction costs. * Potential Benefits: Less reliance on USD, stronger trade ties with China. (Trade wise). * Uncertainties: Limited global acceptance of RMB, RMB exchange rate volatility, impact on USD-denominated debt. 3. The Conversation That Will Arise from This: * Overall: Potential benefits require careful evaluation against risks and complexities. * Additional Considerations: China's willingness to facilitate RMB transactions and long-term impact on Zambia's currency strategy are crucial factors. * The political Climate: Politics regarding this issue will most certainly influence how this will be handled in the near future. #Zambia #Currency #Trade #RMB #ZambiaChina

The ringgit's appreciation is a rebound that can be attributed in part to sound policies - for not making it worse; but not necc something that is going to make it better - for now. That would require Malaysia keeping ahead of many other nations in the region (SG, VN, TH, ID) policy-wise, as we are co-opetiting for investment, trade and upgrading economic engines.

I wrote a commentary on the Malaysian Economy and its Implications on its currency Ringgit . William Pesek Sir has been an Outstanding analyst on the Malaysian Economy where He writes on Nikkei Asia. His quotes , I have noted in the article, and also from East Asian Forum where their valuable inputs are shared and reflected upon to understand the Moves of Ringgit . #Currencyspeculation #FX #Malaysia #Politics #Anwaribrahim #Forex #USDMYR