Effective Exchange Rate Indexes: October 2016 Update

The NEER and REER page has been updated.

Summary

Since the last update in August, both broad indexes have slowly declined, and are now close to revisiting last year’s lows, at least as of the cut-off date (October 2016). The declines have been broad based since April, against all currencies with the exception of the GBP (still +8% since April). I’m expecting to see a further decline in November.

Changelog:

1. Indexes have been updated to October 2016
2. CPI deflators and forecasts have been updated for September/October 2016

The Ringgit and 1MDB

I’m still hearing people talking about the 1MDB effect on the Ringgit. Here’s what I’ve worked out:

4 Thoughts for the Week

GDP Report

Surprisingly strong at 4.3% yoy…or may be not. Iwas expecting a pickup as we had the minimum wage revision, civil service pay revision, cut in the OPR and cut in the EPF contribution rate. The end result was a 6% (qoq SAAR), which is the best quarterly growth rate since 4Q2014. I haven’t delved into the details yet (the bond market tantrum is occupying my working hour attention at the moment), but apparently there was a pretty decent growth contribution from external trade as well.