Saturday, October 23, 2010

Currency Wars Part V

Seems I spoke too soon, though whether this is a blip or something more permanent remains to be seen. BNM’s latest biweekly statement of international reserves shows an RM12 billion increase up to October 15, which puts total intervention to weaken the Ringgit over the past 2 ½ months at a revaluation adjusted RM22.5 billion.

The Ringgit touched a little above 3.08 to the USD on Oct 14 and 15 then bounced back up to 3.12 on Wednesday (Oct 20), which suggests to me anyway, that BNM isn’t that keen for the Ringgit to breach below the RM3.00 level – at least not yet. My sense is that BNM is looking at limiting the Ringgit’s movement against the USD to about 1%-2% a month at most, though the pattern of intervention over the past couple of years suggests that they’re agnostic to the level.

No comments:

Post a Comment