Prime Minister Najib was posed a question in the recent Credit Suisse Asian Investment Conference on the Malaysian Ringgit, on the plans of his government in reconverting the capital control and freeing up the Ringgit. Najib commented that Malaysia was "rather prudent on this issue and was not in a great hurry to make the Ringgit fully convertible".
Under capital control our Ringgit is not accepted out of Malaysia and if you were to travel it is suggestted that you carry enough foreign currencies like the USD or the destination currency of your travel as it will be difficult to convert your Ringgit and foreign banks will not take your Ringgit. You will have to seek out "street changers" or money changers and will have to find the right one who will take your Ringgit than when you find the right changer, it will be at a very much discounted rate.
Some Malaysians are still unaware that the Ringgit is of no use out of Malaysia and foreign banks will not change your Ringgit, as most will just use their credit cards but there are times when credit cards are no good and when you need cash of the local currency. Thanks to Mahathir capital control was imposed since 1998 which have effectively retarded the Ringgit. Which is clearly reflected in the fall in Foreign Direct Investment since capital control was imposed.
In my last trip to Hong Kong when Najib was attending the Asian Investment Conference, i was attending a meeting in an International Bank and had wanted to find out about the latest exchange rate for the Ringgit which has surprisingly been strenthening but to my utter dissapointment was that not only does the bank not take the Ringgit, they can't even offer me the latest exchange rate for the Ringgit. The reply was that they don't keep track of the Ringgit. In the global scenario, Malaysia is becoming more and more irrelevant and have been disregarded and are out of consideration. Other than our commodities of Oil and Gas and Palm Oil, we are not of primary consideration for other investments.
Under capital control, it is sometime seen to be a form of currency manipualtion and can be manipulated. Capital control as a form of counter measure can be considered in time of crisis but prolonged controls will bear no beneficial economic benefits as it is only a reflection of the weakness of the government fiscal policies.
12 comments:
Get out if you can. This pariah country is going to the dogs.
Very nice Hawk, You have had a makeover.Good work!
I don't see this a problem. Just convert ringgit to foreign currency here before you travel. Dr M had done a great job by imposing capital control. Otherwise our country would be doomed long time ago. Thank God, we have brilliant mind like Dr M.
Hey bro,
sorry to pour cold water on this but my findings on availability of the RM in the following cities are:
Shanghai- hard to get
HK- ok
Manila- hard to get
Ho Chi Minh- hard to get
BKK- ok
SG, Jkt- ok
The findings above are based on street shops.
Even Papua New Guinea also don't accept ringgit
Well done! Love your new template. Take care and keep up the good work.
Cheers
When we visited Bali Indonesia, we tried to change the Ringgit and had great difficulty in finding a Money Changer as most of them do not want our Ringgit.
We found one that will change our Ringgit but the rate was very Low. Really nobody wants our Ringgit!
Currency control cuts both ways. If it is so good most countries would do it, won't they? But they don't.
Currency is actually a commodity to be bought and sold and the rate goes up and down subject to the confidence of the market.
Currency control will take away this vagary, but it can make the Ringgit (in this instance) artificially high or low. Too high and your exports are screwed and too low you'd have to pay more for all your imports.
Basically Malaysia wants to play the game, but also wants exemption from certain rules. Naturally few people would want to play with you with a handicap.
Thanks masterwordsmith and Anon 4:56PM,
Glad you guys like the new look :-)
Hi Anon 11:44 PM, You are right Dr. M is a genius, by imposing capital control he started bailing out all the cronies and his son's companies with your money.
This mamak is so brilliant that he can go about becoming a malay and gets away by calling them lazy and all sorts of name.
He is such a genius that his children can become billionaires!
He is so brilliant that he started a new party and they still think that it is the same old umno when it was not even closed to resembling the real one.
He is so brilliant that he created so much debt for the country and the people still thinks its all rosy.
Truly a brilliant mind!
Hi residentwangsamaju,
Yeah you can still find some money changers who could take your Ringgit but it will be at a much lower rate. But forget the Banks as Banks won't look at the Ringgit.
Hi Serena, telur dua (nice name : ))
My opinion is that the currency must be made free of control otherwise progress or any so called reforms will be very difficult. Capital control is like a drug and prolonged used will have adverse side effects and it is actually visible now.
Hawkeye,
Congratulations on your new image blogsite.
What telor dua said is correct.
It will cut both ways...
Have been travelling overseas frequently for over four decades.
Inview of the difficulty to exchange & exchange rate loss on the Rgt, since the 80s, I have encouraged my friends/colleagues to carry a few hundred Rgt as standby, with more GB Pounds, Euros, AUD & USD as the case maybe (Destinations).
Ofcourse the Amex & Mastercard/ Visa card will be a must.
At some airports like India, China, Karzakstan, etc one has to declare all curriencies upon arrival & departure, which can be a nuisance.
If our nation is fundamentally strong with its Policy, Administration, Productivity, is Export Oriented, Global Paticipation, etc....
Maybe it might help like the Singapore Dollar which is more readily accepted.
Bolehland is slowly drifting towards....Zimbabwe unless there is change...
Fancy bringing a Plastic bag full of Rgt to buy rice or a loaf of bread?
Cheers.
Hi flyer168,
you still flying around? yeah as a frequent traveller you would know best but with those high credit limits on the cards you will have no problem. :-)
Cheers!
yeah, it will feel great carrying a big bag of ringgit just to buy a loaf of bread.Malaysia Bole!!!
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