Friday 25 April 2008

What's up?

Ringgit UP? YES.
Retail prices UP? YES!

but what's down?


Will the 'greenback' ever be so valueless that it ends up like this?

"New 10 year high for the Malaysia Ringgit (MYR) against the US Dollar (USD)"
"RM3.13 = US 1.00"

True, but the US$ is at its lowest level for 20 years!!

So this headline is also true:

"New 10 year low for the US Dollar (USD) against the Malaysia Ringgit (MYR)
US$ 1.00 = RM3.13"

BERNAMA reported on 23rd April 2008, that

“The Malaysia Ringgit climbed to 3.1310 against the U.S. dollar in early trading Wednesday, a fresh 10-year high on continued brisk demand for the local unit in view of strong economic fundamental, dealers said.

At 9.00am, the ringgit was traded higher at 3.1310/1340 against the greenback compared with Tuesday’s closing of 3.1370/1400.

A dealer said that the ringgit appreciation was also spurred by dollar- selling pressure amid concerns over the United States economic outlook.

Forex players had started to sell the dollars ahead of the US Federal Open Market Committee meeting this April 31 on expectations of another cut in the interest rate, he said.”

The truth of the matter is:

The United States Dollar is at its lowest level in 20 years.

For example:

Over the last 12 months the exchange rate between Euro and USD changed from 1.35 to almost 1.60 which translated into a devaluation of the USD of more than 15 percent.

The USD also lost value against most other currencies, including the MYR.

So the truth is that the value of the USD has declined over the past 20 years, and naturally, after the pegging of the MYR to the USD at a rate of 3.8 was loosened, the rate between the MYR and the USD has similarly changed!

So the apparent strength of the Malaysian Ringgit is something of an illusion, and this is being milked to the full by the BN in their attempt to get back some popular support.

Suggestio falsi

- Suggestion of something false

No comments: