tag:blogger.com,1999:blog-6297413898275266606.post3062525630990973965..comments2024-03-27T18:15:59.096+08:00Comments on Economics Malaysia: Exchange Rate Policy 2: Measurementhishamhhttp://www.blogger.com/profile/06265308095732759923noreply@blogger.comBlogger7125tag:blogger.com,1999:blog-6297413898275266606.post-75273018689845269152009-03-26T08:29:00.000+08:002009-03-26T08:29:00.000+08:00Just to add on to my comment:Both MYR real and nom...Just to add on to my comment:<BR/><BR/>Both MYR real and nominal indexes are within 10% of the index base. If you consider 5% as measurement error, and the further 5% as a cycical component, you might consider PPP to hold. As I said, the evidence is inconclusive.hishamhhttps://www.blogger.com/profile/06265308095732759923noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-289887527746156222009-03-26T08:24:00.000+08:002009-03-26T08:24:00.000+08:00WY,1. As per my previous post on exchange rate con...WY,<BR/><BR/>1. As per my previous post on exchange rate concepts, you've just discovered why PPP doesn't appear to hold. I've described some of the reasons in that post as well - the Balassa-Samuelson effect, the impact of interest rate differentials and risk premiums, and so on.<BR/><BR/>2. Correct. Actually a few ways to do this:<BR/>a. Restrict the capital account i.e. capital controls. This hishamhhttps://www.blogger.com/profile/06265308095732759923noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-43950258731452536182009-03-25T21:05:00.000+08:002009-03-25T21:05:00.000+08:00Hi HishamH,Thx. Great post.Some questions :1. I th...Hi HishamH,<BR/><BR/>Thx. Great post.<BR/><BR/>Some questions :<BR/>1. I thought, theoretically, real exchange rate should be the same (real exchange rate hovers around 100). Wonder why they are not.<BR/><BR/>2. For those exchange rate pair with high discrepancy between real & nominal, their nominal rate seems to go nearer to 100. Are they trying to stabilise or reduce fluctuation of nominal WYhttps://www.blogger.com/profile/00687384573537625332noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-32525178009207490352009-03-25T15:20:00.000+08:002009-03-25T15:20:00.000+08:00If I had to hazard a guess, I'd say flattening wou...If I had to hazard a guess, I'd say flattening would be the most likely scenario - rates are ridiculously low already across the board. Don't hold me to it though.<BR/><BR/>OTOH, this is essentially quantitative easing, so USD negative. Market reaction seems to bear that out.hishamhhttps://www.blogger.com/profile/06265308095732759923noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-66168741819962276282009-03-25T14:34:00.000+08:002009-03-25T14:34:00.000+08:00we shud have a few more years of interesting times...we shud have a few more years of interesting times ahead....<BR/><BR/>wat u make of Fed Plan to go long on d longer end of the curve...do u see flattening as a whole....or do u see a parallel shift down perhaps even a pivot with d shorter end crossing into negative(or near 0) territory?<BR/><BR/>How do u see d impact of these dev for FX Forwards market globally?satDhttps://www.blogger.com/profile/03495554463280249599noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-31191536488299088342009-03-25T01:09:00.000+08:002009-03-25T01:09:00.000+08:00If you're talking about the trade weighted index -...If you're talking about the trade weighted index - no. MYR movements have been pretty much in the "noise" range, even before and after the depeg.<BR/><BR/>For individual bilateral rates, I'd take the spike in oil 1H08 as a potential break, but you really need a few more years of data to test that ;)hishamhhttps://www.blogger.com/profile/06265308095732759923noreply@blogger.comtag:blogger.com,1999:blog-6297413898275266606.post-57089472890899846312009-03-25T00:55:00.000+08:002009-03-25T00:55:00.000+08:00nice post! cant wait for 3rd installmentr u seeing...nice post! cant wait for 3rd installment<BR/><BR/>r u seeing any structural breaks emerging?satDhttps://www.blogger.com/profile/03495554463280249599noreply@blogger.com