MYR (Malaysian Ringgit)

Re: MYR (Malaysian Ringgit)

Postby winston » Thu Nov 03, 2016 1:06 pm

Why Malaysian Ringgit Will Beat Singapore Dollar

By Shuli Ren

After much up and down this year, the Malaysian ringgit is little changed against the Singapore dollar as we head into the year-end.

But things may change, and Singaporean vacationers and shoppers may feel the pinch when they visit Malaysia.

Credit Suisse is bullish on the ringgit and bearish on the Singapore dollar.

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... re-dollar/
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Re: MYR (Malaysian Ringgit)

Postby winston » Fri Nov 11, 2016 2:18 pm

Traders in Kuala Lumpur said the central bank had told them not to quote offshore rates and was approving large ringgits sell orders on a one-off basis in a bid to keep a lid on things.

The tactic seemed to work with onshore trade reportedly very thin.

HOT MONEY HEADACHE

However, yields on Malaysian government bonds told another story.

Yields on 10-years have widened 22 basis points since Wednesday, while those on 20-year and 30 year bonds have widened 21 basis points and 10 basis points respectively over the same period.

Almost 40 percent of Malaysian government bonds are in foreign hands.

Source: Reuters
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Re: MYR (Malaysian Ringgit)

Postby winston » Fri Nov 11, 2016 7:50 pm

Malaysian ringgit sinks offshore just as economy perks up

By Jongwoo Cheon and Joseph Sipalan

The ringgit's one-month non-deliverable forwards (NDFs) lost as much as 3.7 percent from the previous close to 4.5395 per dollar, its weakest since at least September 2004


Foreign investors, who hold about 40 percent of outstanding government bonds, pulled 8.4 billion ringgit out of that market in September, after three months of inflows.

That was the largest monthly outflow since August last year when the country's markets tumbled on a political crisis swirling around Prime Minister Najib Razak and corruption allegations involving 1MDB.

But, in October, the Malaysian government bonds saw inflows of $543 million, and foreign reserves stood at $97.8 billion at the end of that month, up from $97.7 billion at the end of September


Source: Reuters

http://in.reuters.com/article/malaysia- ... NKBN1360K5
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Re: MYR (Malaysian Ringgit)

Postby winston » Sat Nov 12, 2016 9:25 am

Why the worry on the offshore ringgit market?

BY M. SHANMUGAM

In Malaysia, foreigners hold almost 50% of the government debt papers.

China on Wednesday added to the weakening of Asian currencies, by adjusting downward the band of the yuan against the dollar.


There has not been any trading of the ringgit outside the Malaysian shores since 1998 when the Government imposed capital controls. However the NDF market is an unofficial market that tracks the movement of the ringgit against the US dollar.

It operates on a 24-hour basis and is used by many corporations and traders as a guide on where the ringgit is heading against the US dollar. It is also seen as a speculative market because it is settled in US dollars.

The ringgit has weakened considerably against the US dollar in the NDF market since Thursday. It hit as high as 4.54 against the dollar at 10am yesterday.


According to dealers, they were told not to enter into any US dollar transactions with banks located outside the country.


To counter this influence of the NDF market, the central bank had initially told banks to quote the US dollar at a rate that is much lower than what was in the NDF market.

For instance, the rate in the NDF market was at 4.33 against the dollar at 8am yesterday. But the local banks quoted at a much lower rate of 4.29.


At about 6pm yesterday, the ringgit was trading at 4.55 against the dollar in the NDF market.


Source: The Star

http://www.thestar.com.my/business/busi ... it-market/
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Re: MYR (Malaysian Ringgit)

Postby winston » Sun Nov 13, 2016 9:38 pm

Malaysia's c.bank says re-enforing ringgit offshore trading rules

Nov 13 Malaysia's central bank said on Saturday that it was taking measures to re-enforce existing rules that are in place to prohibit facilitation of offshore trading of the ringgit.

The bank said Malaysia's currency remains a non internationalised currency, thus any offshore trading of ringgit such as ringgit non-deliverable forward (NDF), is not recognized.

It added Malaysia's FX market remains open and the bank stands ready to provide liquidity if necessary to ensure orderly market.

Malaysia's ringgit sank to its weakest in more than 12 years in offshore markets on Friday.

"Bank Negara Malaysia would like to state that there is no change in the Foreign Exchange Administration (FEA) rules and there is no introduction of any new measures," the bank said in a statement.

Source: Reuters
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Re: MYR (Malaysian Ringgit)

Postby winston » Mon Nov 14, 2016 8:01 am

Bank Negara takes on currency speculators

BY AFIQ ISA

For the past two years, the ringgit had been weaker against the US dollar in the offshore market compared with the onshore market, indicating bearish sentiment going forward. However the ringgit is not the only emerging market currency that had come under pressure.

KUALA LUMPUR: In a bid to stabilise the volatile ringgit, Bank Negara is expected to maintain precautionary measures to ensure proper price discovery.

The central bank will also curb speculative activity in the offshore market which has driven the currency far off from its fundamentals.

It is learnt that banks have been told to disclose price quotes as soon as currency trading begins today to facilitate orderly trading and prevent a recurrence of last Friday when they were unable to disclose foreign exchange prices for a large part of the day.

However, there will be close scrutiny to ensure there is no abuse of the US dollar-ringgit transactions. Towards this end, the central bank said in a statement yesterday that banks must not facilitate trades that could be related to offshore ringgit market activities which it does not recognise.

The central bank had assured that it would provide liquidity in the currency markets if necessary.

“The Malaysian foreign exchange (FX) market remains open and Bank Negara stands ready to provide liquidity if necessary to ensure orderly market. Malaysia continues to welcome real investments and provide all avenues for FX transactions and hedging requirements onshore,” it said in a statement.

This is expected to provide relief for those having apprehensions on US dollar transactions done.

According to several currency dealers, there was confusion last Friday as local banks were told by the central bank to follow last Thursday’s onshore closing rates of RM4.29 in their transactions. Only very late in day was the exchange rate fixed at RM4.34 against the dollar.

Additionally, banks were also told not to provide US dollar-ringgit quotes to their offshore counterparts, something that added to the confusion. It led to to very little US dollar-ringgit trades done last Friday.

It is learnt that the restrictions by Bank Negara came after it saw high volatility in the US dollar-ringgit exchange rate in the offshore market that is known as the ringgit non-deliverable forward (NDF) market.

Dealers tend to observe the offshore rates in the early trading session for clues on how to price the US dollar against the ringgit until the official exchange rate is published by 3:30pm.

Offshore US dollar-ringgit rates, as indicated by the one-month ringgit NDF, went as high as RM4.535 against the dollar before settling down at RM4.4865.

The figure represented a large spread over onshore rates, which were the official rates – priced at RM4.3418 against the dollar last Friday.

Governor Datuk Muhammad Ibrahim had reiterated that there would be no pegging of the ringgit and stressed that the currency’s pricing should not be influenced by speculative positioning in the NDF market.

For the past two years, the ringgit had been weaker against the US dollar in the offshore market compared with the onshore market, indicating bearish sentiment going forward.

However the ringgit is not the only emerging market currency that had come under pressure.

Currency markets across the globe were hit hard last Friday by the sudden appreciation in the US dollar which triggered a major sell-off in the emerging markets.

On the same day, the rupiah fell to a five-year low as its central bank was forced to intervene in the markets. Meanwhile, the People’s Bank of China set its reference rate for the yuan at a lower rate of 6.8115 versus the dollar, the lowest in more than six years.

The global sell-off across asset classes in emerging markets was an immediate reaction to Donald Trump’s shock win during the Nov 8 US presidential race.

Trump planned a US$1 trillion spending on infrastructure – something the president-elect felt would create thousands of new jobs and result in a revival of the US economy.

The measures are expected to increase inflation in the coming years forcing the US Federal Reserve to raise interest rates.

The prospects of such an event were priced in by investors who sold US Treasury bonds throughout last week. The yield on the benchmark bond rose to 2.15%, or a large move of more than 40 basis points in the two days following the election results.

Closer to home, yields on the 10-year Malaysian Government Securities rose to 3.94% last Friday, or a move of 27 basis points in just two days.

“The ringgit and other emerging market currencies will continue to play hostage towards the US dollar strength and rising US rates as the market digests Trump’s speeches and actions.

“Ultimately the onus would be on global central banks to respond to the threat posed on their currencies as the year draws to a close and market liquidity worsens,” according to Affin Hwang Research in a Nov 11 note.

Source: The Star
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Re: MYR (Malaysian Ringgit)

Postby winston » Fri Nov 18, 2016 9:21 am

FOREIGN BANKS SHAKEN BY MALAYSIA'S MOVE TO HALT CURRENCY SLIDE

Source: Reuters

Form letters, sent this week from onshore banks to their offshore counterparts, asked compliance officers to sign commitments to cease trading the ringgit in the NDF markets and then send the letters back to Bank Negara, Reuters reported on Wednesday.


Investors typically use the liquid NDF markets in Singapore and Hong Kong to exchange ringgit for dollars because of the many restrictions in the domestic market.


While Malaysia allows foreigners relatively open access to its domestic bond and stock markets, it prohibits any offshore trading of its currency or related derivatives.

Some foreign banks said they were told their investments cannot be moved out of Malaysia if they don't sign the letter. The head of trading at a Western Bank in Hong Kong described the situation as "being in a state of limbo" due to the regulatory uncertainty.


Foreign investors pulled 8.4 billion ringgit out of government bonds in September, the largest outflow since August last year


Source: The Edge

http://smr.theedgemarkets.com/article/f ... e-87358173
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Re: MYR (Malaysian Ringgit)

Postby winston » Sat Nov 19, 2016 8:00 am

Bank Negara takes a firm stance

BY JAGDEV SINGH SIDHU

The signing of attestation forms from clients of licensed banks to ensure transactions are not facilitating the NDF market seems to have worked in some scope.

The other stick against banks in Malaysia getting involved in NDF transactions is the potential punitive action by the central bank.


One trader says a bank in Singapore has told him that it would no longer be dealing with ringgit NDFs, but he suspects the trade is still active in Hong Kong and other financial centres.


The onshore market for the ringgit is related to trade and investment purposes where speculation is a no-no for the central bank. Paperwork has to accompany onshore transactions and the central bank does monitor for speculative trades.

One key purpose the ringgit NDF market is used for is hedging purposes. The other reason is that the market has confidence, depth and liquidity.


Statistics show that the average daily volume is US$3.5bil, based on data by the Depository Trust and Clearing Corp. It is a US regulation requirement for US banks to report NDF trades.

In comparison, the onshore market trades US$8.1bil worth of dollars each day to fulfil the need of businesses and investors.


Source: The Star

http://www.thestar.com.my/business/busi ... rm-stance/
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Re: MYR (Malaysian Ringgit)

Postby winston » Mon Nov 21, 2016 6:47 am

Can the central bank wipe out NDF?

BY AFIQ ISA

Over the past week, Bank Negara has sternly told local banks to stop using NDF rates as reference in pricing the currency in the foreign exchange (forex) markets. Additionally, it has attempted to secure commitments from foreign banks to stop trading NDFs offshore.

On the other hand, it must be said that multinational corporations as well as banks have long used NDFs for conventional purposes. For example, the instrument is essential for firms to hedge their currency holdings against future fluctuations.

To solve this issue, instead of using NDFs, those with hedging requirements have been urged by Bank Negara to trade onshore forwards where the rates are derived from local banks.


For some foreign banks and hedge funds, there are few reasons to quit trading NDFs, as they provide ease of access and are regarded as reliable benchmarks, one currency dealer notes.


Source: The Star

http://www.thestar.com.my/business/busi ... e-out-ndf/
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Re: MYR (Malaysian Ringgit)

Postby behappyalways » Wed Nov 23, 2016 7:48 pm

Malaysia Keeps Rates on Hold as Currency Tumbles
https://www.bloomberg.com/news/articles ... cy-tumbles
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