The NEER and REER page has been updated, as has the Google Docs version.
Summary
Despite relative stability against the USD in February, the MYR continued to decline on a multilateral basis. The NEER fell -0.53% mom, while the REER fell-0.91%. More moderate drops were seen in the sub-indices.
On a bilateral basis, MYR is now on a nine-month losing streak against the AUD (-2.27%), though the biggest drop was against the KRW (-3.01%). Gains were recorded against the PHP (+0.79%), HKD (+0.37%) and USD (+0.32%). What’s interesting is that, despite the continued decline, the picture appears to be balancing out a little – gains were recorded against 6 currencies (out of a total of 14 in the indexes), versus 4 last month, and just 1 in December and November.
Changelog:
- Indexes have been updated to February 2017
- CPI deflators and forecasts have been updated for January 2016/December 2017
- Trade weights have been updated for the 4Q16
Posts
Hishamh,
ReplyDeleteLooking at the long term trend (since 1/1/97), RM is depreciating against all major currencies (USD, SGD, AUD, CAD, etc). What do you think is/are the major factor(s) that is driving this depreciating trend?
@Zuo De
DeleteMight take a whil to dig up, but at least for 1997-2005, it was largely because we were pegged to the USD, which first rose in up to 2003, and depreciated sharply. The gentle depreciation slope since then is harder to figure out.
Hishamh, the immediate depreciation of the USD after FED increase the rate is puzzling. All most the whole analysts community said that it is the end of emerging market currencies (of which Malaysia is one), a flight to save haven (i.e. USD). Now the opposite is happening ... weird, or the whole analysts world are liers??
ReplyDelete@Zuo De
DeleteIt was because of Yellen's comments afterwards, and the inclusion of "symmetric" in the statement. That means that they are willing to tolerate higher inflation, and that whatever rate hikes in future will still be data driven i.e. might still be pulled back. That's all Dollar negative.