MYR (Malaysian Ringgit)

Re: MYR (Malaysian Ringgit)

Postby winston » Tue Nov 29, 2016 8:02 am

Bank Negara wants rules of NDF market to be changed

BY JOSEPH CHIN

KUALA LUMPUR: Bank Negara Malaysia (BNM) wants a change in the rules for the offshore ringgit non-deliverable forward (NDF) market following the recent weeks of speculative position taking.

Saying that “perhaps it is time to change the rules of the game,” central bank governor, Datuk Muhammad Ibrahim said on Monday that the financial market players, especially those in the NDF market, need to be as transparent as the demands they expect of others.

“Similarly, jurisdictions that govern them ought to make this opaque market more transparent and accountable,” he added in his keynote address at the Global Banking Leaders programme here,

Paradoxically, while there has been tremendous demand globally for transparency on governments and policymakers, the same level of intensity is not necessarily reflected for financial market players, he pointed out.

StarBiz reported there has been a substantial selldown in government bonds, led by foreign selling, since the aftermath of the US presidential election.

The rout in the country’s bond market saw the Malaysian Government Securities (MGS) yields rising at its fastest pace ever to around 15-month high in a matter of two weeks. The ringgit is now hovering at its lowest levels in 19 years as a result of continued capital outflow.

Speaking on recent developments in the ringgit exchange market and BNM’s announcements to reinforce and strengthen the market from being adversely impacted by speculative activities, he said:

“Our market activity and exchange rate should reflect the economic realities of Malaysia. As such, when it comes to the pricing of the ringgit exchange rate, it should never be disconnected from real economic activities in the onshore market,” he said.

He said in recent weeks, speculative position taking in the offshore ringgit NDF market has had adverse impact on the domestic foreign exchange market.

“While the ringgit faced the same external shocks as many neighbouring countries, activities in this opaque market had exacerbated the depreciation pressure by disrupting the price discovery process. This, for me, should not be tolerated.

“For a small but highly open economy like ours, we face unique challenges. The volatile and erratic movements in the financial markets render the opening up of financial markets and continuous liberalisation more challenging.

“Nevertheless, as an economy that operates on free market principles, it is still a path we need to take. But we need to open up responsibly – we have to ensure the markets, players and products in our economy are transparent, fair and serve their intended purposes,” he said.

Muhammad also said BNM had been taking measures to reduce the speculative and damaging influence of NDF since the early 2010s.

“It is our responsibility to ensure orderly functioning of the foreign exchange market and maintain public confidence in the financial system. The recent actions by the Bank (BNM) are merely to reinforce our existing policy on offshore trading of the ringgit.

“Besides reducing the detrimental effects of financial market speculation on our markets, these policy reinforcements are aimed at instilling greater transparency, integrity and fairness in our financial markets. This is our responsibility as regulators and policymakers, of financial market development that aspires to see a more open and transparent market,” he said.

Source: The Star
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Re: MYR (Malaysian Ringgit)

Postby winston » Thu Dec 08, 2016 7:36 am

Bank Negara spends US$1.9bil defending the ringgit

BY JAGDEV SINGH SIDHU

Source: The Star

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

Postby winston » Mon Dec 19, 2016 12:06 pm

Malaysia’s Ringgit Is Looking Real Cheap Versus Oil: Time To Buy?

By Shuli Ren

The Malaysian ringgit declined as much as 0.1% to 4.4805 to the dollar today, the lowest level seen since the 1998 Asia Financial Crisis.

According to Societe Generale, the ringgit is stating to look really cheap, considering Malaysia is a [b]net oil exporter and oil prices have surged 15% [/b]since the landmark OPEC deal.

The French bank estimates that the Malaysian ringgit, along with the Mexican peso, are almost 3 standard deviation from their historical averages when we benchmark against oil prices. In other words, we get to this kind of price level with only 1% probability. (See chart)

However, Societe Generale does not encourage us to buy the ringgit yet. The Malaysian ringgit and the South Korean won proved to be the most sensitive to the Federal Reserve‘s hawkish hike last week, and Malaysia has political risks.

Source: Barron's Asia

http://blogs.barrons.com/asiastocks/201 ... me-to-buy/
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Re: MYR (Malaysian Ringgit)

Postby behappyalways » Tue Dec 20, 2016 2:20 pm

Ringgit Dips to Weakest Level Since 1998 Asia Financial Crisis
https://www.bloomberg.com/news/articles ... ial-crisis
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Re: MYR (Malaysian Ringgit)

Postby winston » Wed Jan 04, 2017 1:16 pm

Malaysia Ringgit Keeps Us Awake At Night: Credit Suisse

By Shuli Ren

During the Trump Tantrum last November, Malaysia’s central bank asked foreign banks to stop trading the ringgit in the offshore non-deliverable forwards market.

Soon after, the central bank said exporters must convert 75% of their earnings into the ringgit.

Instead of calming the markets, these capital control measures “elevated concerns on the Ringgit among foreign investors,” noted Credit Suisse‘s strategist Tan Ting Min. Min sees the ringgit to fall further, to 4.55 in 12 months.

There are a lot of things Credit Suisse dislikes about ringgit.

First of all, foreign investors hold 48% of Malaysian government bonds, with 47 billion ringgit maturing this year, a 50% rise in volume from 2016.

“We also worry over the risk of a weight reduction in the GBEM Global Diversified index (9% weighting) if poor forex hedging liquidity persists,” notes Min.

Foreign banks tend to use the forward markets to hedge against currency declines.

China is now Malaysia’s best friend, bailing out the troubled sovereign fund 1MDB. “But there is no such thing as a free lunch.”

Malaysia has been underperforming for three consecutive years, as foreigners became net sellers.

Domestic institutions related to the Malaysian government have been buying in foreigners’ place, but how much more support can the “national team” provide?

“On the political front, Prime Minister Najib is here to stay. If PM Najib survived the very turbulent 2015 and is still helming Malaysia, then his intention to remain the Prime Minister is clear.

Political stability is good news for the stock market but many would argue that there is a lot of ‘anger’ in Malaysia. Most Malaysians feel increasingly dissatisfied with the direction that the country is heading towards,” wrote Credit Suisse.

In the last year, the iShares MSCI Malaysia ETF (EWM) fell 4%.

Source: Barron's Asia

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

Postby winston » Thu Jan 05, 2017 7:23 am

Things Will Get Worse for the Malaysian Ringgit: BMI Research

by Will Davies

Ringgit was among the weaker major Asian currencies in 2017
China’s economic slowdown will weigh on Malaysian trade: BMI

One reason is because it is affected by the yuan, which is going to remain under downward pressure


There will also likely be a narrowing of real interest-rate differentials between the U.S. and Malaysia, with the latter probably staying on hold this year while the Federal Reserve increases rates by a total of 50 basis points.


Further weakness in the global bond market would also put the ringgit under pressure given that around 40 percent of Malaysian bonds are held by foreigners.


Source: Bloomberg

https://www.bloomberg.com/news/articles ... i-research
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Re: MYR (Malaysian Ringgit)

Postby winston » Sun Jan 15, 2017 6:34 am

Full impact of currency measures by mid-year

BY PARVIN RAJ MOHAN

“Bank Negara and the Financial Markets Committee (FMC) have taken intervention measures to mitigate speculative activities in the offshore market and rebalance the demand and supply in the domestic foreign exchange market.


Source: The Star

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

Postby winston » Sun Jan 15, 2017 8:56 am

Malaysia to consider more steps to stabilize ringgit If needed

Bank Negara Malaysia could look at ways to improve liquidity if necessary


“Only if appropriate, we will introduce new measures,” the governor said.

“But these new measures are not capital controls, not fixing of the ringgit, but to stabilize the ringgit.


The central bank’s currency measures will take three to six months to show results though initial outcomes show the ringgit has stabilized “very much”


Source: GH Wall Street

http://ghwallstreet.com/2017/01/13/mala ... if-needed/
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Re: MYR (Malaysian Ringgit)

Postby winston » Tue Feb 07, 2017 7:44 am

Malaysia's Ringgit Crackdown Spooks Overseas Investors

by Y-Sing Liau and Yumi Teso

Restrictions are making market lose confidence, NAB’s Wee says
Global funds cut Malaysian debt holdings by most since 2008

Global funds cut holdings of Malaysian debt by a combined 25.2 billion ringgit ($5.7 billion) in November and December, the biggest two-month outflow since 2008,


The ringgit has fallen almost 2 percent since Nov. 15, the region’s worst performer after the yen, and reached 4.5002 per dollar on Jan. 4, the weakest since the Asian financial crisis.

The currency will slide to 4.54 by mid-year, according to a Bloomberg survey.


United Overseas Bank Ltd. predicts the currency will strengthen to 4.35 per dollar by June 30 as it regains a positive correlation with crude oil. Oil-related products are Malaysia’s second-largest export.


Macquarie: The ringgit is poised to end this year at 4.80 per dollar, close to the record low of 4.8850 reached in January 1998


“While Bank Negara can say the onshore USD/MYR deliverable forward market could provide that hedge option, it is less liquid, certainly for after-hours trades. The cost of hedging for foreign investors has definitely risen at the margin.”


Source: Bloomberg

https://www.bloomberg.com/news/articles ... -investors
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Re: MYR (Malaysian Ringgit)

Postby winston » Fri Feb 10, 2017 7:26 am

Ringgit seen recovering

BY CECILIA KOK

The investment bank expects the ringgit to improve to 4.35 against the US dollar in the second quarter of this year, before strengthening further to 4.20-4.25 against the greenback in the second half of 2017.


A more “synchronised” recovery in 2017 as stronger US growth translates into stronger Asian exports.


“The greenback tends to do very well in a divergent economy, or in a crisis, but not necessarily so in other times”


“There’s a clear story that finally, after two plus years of contraction, Asean export growth will be positive in 2017...


Malaysia’s gross domestic product (GDP) growth would accelerate to 4.4% this year and 4.5% in 2018 from the estimated 4.2% in 2016.


Source: The Star

http://www.thestar.com.my/business/busi ... ecovering/
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