Thursday, 22 August 2013

Weakening Ringgit Malaysia Worrisome

Anyone care to explain what is happening to our Ringgit Malaysia (MYR)? Why is the MYR sliding down so low as compared against USD. It now takes MYR 3.32 to get USD 1.00.

I have been hearing that our country Malaysia is on the brink of bankruptcy due to the deficit and enormous loan amounting to hundreds of billions. I'm no economist but that's a huge sum and is our country able to repay this enormous debt and revive our cash reserve to be green in surplus.

If our country were to bankrupt we will see inflation soar, our MYR worthless and share market crashing. We might need to pay MYR 1,000.00 for a loaf of bread then.

But on the other hand, a weakened currency is beneficial for exporters that will promote more investors to turn to our country. Countries like China devalues their currency and they see a large traders spending enormous amount of money in China. We practically see 'Made in China' on almost every item that we purchase nowadays. And this has increased China's foreign reserve.

Though it is beneficial to exporters, we the consumers suffer when we purchase imported goods. And from what I understand, Malaysia imports more than we exports which is bad for the economy. Take oil for example. We are an oil producing country but yet we are importing oil which does not make sense. Malaysia produces top quality crude oil but why are we still paying so much more for our petrol.

I really pray and hope that our leaders are sincere in their reforms and keep their nation in mind when they make any decisions.

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