Malasiyan ringgit is falling!

No, the outlook is poor for probably the next year and a downgrading (Fitch) of Malaysia seems imminent. The good thing is that currency exchange rates mean you get more Rm in return. The issue is that GST is just about to be applied and that going to be 6% increase in the price of some items and services. But everything is relative, as long as you want to spend your RM in Malaysia. Also fixed term deposits here are paying up to 3.3% per annum. So its a good time to save while living in Malaysia and waiting for better times.

Hi two factors. One inflation in Malaysia is higher than many countries and this causes rate to get worse over time. It is simple maths.Two oil prices have tanked and Malaysia is very oil based economy - estimated at 60% of economy over all. This means a lower rate especially to USD. This imports inflation as well feeding the long term effect of changing prices.

So it looks bad for at least two years.

Gravitas real interest rates are negative as inflation is greater than 3.3% in real life so bad to save here (except emergency money). But same most place now too much cash due to QE

Nemo - but leaving money in a current account is insanity as it earns almost nothing (sometimes some banks give a small %). Inflation operates the same way everywhere in the world, but its not an excuse to "do nothing". The option is therefore to exchange RM into another currency (albeit at unfavourable rates) and get high interest on the resulting currency...... Risk: collapse of that parking currency as well.  One word of warning, please think very carefully an not listen to all the Financial Advisers who tell you they can get you 10% interest per annum on an insurance bond investment. They are working on commission - so YOU are paying their "salary" and IT IS NOT POSSIBLE because of the instability of the underlying vehicles, e.g. oil, gold, silver, shares, etc. RISKY TIMES so dont overstretch yourself and play a little safer than normal. AND dont spend all your cash to avoid inflation as Nemo suggests................

You mean to say.... Ringgit may improve in coming days when the oil prices improves ?.or  Will it fall more ?

It will probably not perform any better than it does now for about 1-2 years or until the crisis in the O&G industry improves. These things tend to take a long time to be resolved. The prediction is currently that the RM will be 3.95 against the USD by September before ending the year at RM3.82. It being slated as the worst crisis in Asia in the last two decades.

Yes when oil price goes up will help but lots of damage done.

Gravitas what I meant was invest in real assets - best to send home and do that - or invest in stocks/property except for emergency cash (3 months living expenses).

A falling RM is good for foreigners (like USA) as their money goes further so its a good time to buy RM. If you already have RM and need USD, i pity you.  Previously I put a lot into my RM savings account at the old 3.8, then it the RM fell to 2.9 (i think) and thats a gain. Whats bad is the reverse, now Malaysian buyers of foreign goods have to pay more.

Importers would be having heart attacks now because they wait and wait and use spot pricing to settle their bills. With that spot price now killing them daily, its sure to cause huge losses. They may even try to settle their bills at the rate at the time they were billed (months ago) and now the foreign exporters will cry foul. Too funny. Everyone is shooting themselves in the foot!

As where to put money, i too agree that the high interest accounts are extreme risk. I have mine in a bank savings account which pays near nothing. My girlfriend has two high risk accounts for the past five years, one pays 8% and the other pays 11%. She keeps showing me her statements and gloating but so far I havent budged and bought in. I consider them outright frauds but they are OK if you take some small amount and throw it to the wind. Maybe some good will come of it, maybe not.

I cant blame her for wanting to learn Forex in this environment. A Malaysian company advertised a free course in April and I might take it to learn something. For everyones info, those corner Money Changer shops dont give a damn for your $100 exchange, they are highly skilled 24/7 forex traders and thats how they make their money. I have asked at shops I got to know well over time and the owners always refused to give me forex lessons. Interesting. It may go back to the 1997 crisis during which Mahathir banned forex and metal trading.

But everyone needs to learn the basics, the posters question is exactly the reason why. All the better if one can make some money but in all cases, learn so that you dont lose any.

Ringgit is pretty weak when world oil price is low. Yes inflation is pretty high back there. I need to make much more in order to save. Currently in Canada, its not as bad, I could save more in lesser amount of years.

With RM being too low, I'm holding out selling my property there and converting it to CAD.

Philip - now is certainly not the time to convert to CAD I guess because of the weak RM, but who knows what the future holds. Fixed term deposits until a revival are an option paying around 3.2% in RM depending on term.

@Gravitas, that's true. And now with this news, http://www.thestar.com.my/Business/Busi … ?style=biz
It's certainly not a good time. But its good to pump in my Canadian/USD to RM.

I was an investment banker (hedge funds mostly) and there is a technical term for home traders with no experience "stupid suckers" often they gloat over some winnings (it is pure gambling for them) before they get wiped out one day.

Fx Kong term is simple.

Say malaysian inflation 10 per cent. UK 2.

Prices double every 7 years in malaysia  (using rule of 72 to avoid grabbing a calculator)

UK every 36 years. In that time malaysian prices have increased 16 times. 8 times faster than UK.

So now 5.5 to pound. In 36 years time 44 RM to pound On average. Ok inflation rates change but illustrates that over a lifetime high inflation here is killing savings here.that is why Chinese buy loads of properties.

But the property market here is also a beached whale at the moment because of a sharp turnaround and reduction in potential rental clients has crippled some speculators. I think people here have fallen for the hype of the property developers. Another example is over supply. There is a new Mall (Quill City) 500 m from Suria (Twin Towers) and its supposed to survive without an immediate housing area and no dedicated monorail stop and access. Its worrying times all round at the moment for anyone overstretched.

That depends on where your property is. My apartment is just 10 min walk from 1Utama (and likes of IBM, KPMG and TV3) plus being very close to Uptown, is pretty easy to rent out and fetches a good rental price, besides having a low service fee for a place in that area.