Exchange Rates for RM

[penjohorian]

Whenever M opens his mouth, RM cheong to rooftop..!!
The chart can put it aside..:p

What a powerful M factorial....

 

[bakkuttay]

Unbelievable 2.82 now

Where????........

 

[palden]

Whenever M opens his mouth, RM cheong to rooftop..!!
The chart can put it aside..:p

Must thank him on behalf of all Singaporeans. Najib also contributed. Any plans to honor them this coming SG50 national day?

 

[FXHarvest]

You are assuming that we are paying by cash. But if you take 70-80% loan like a normal long-term investor, you will huat to the bank if you are earning S dollars.

If ringgit goes down to RM 4, I am sure many many Spore dollar earners will be keen to buy over more Malaysia properties to retire. RM1 million properties suddenly become S$250,000... just years back they need to use S$400,000 to convert to RM 1 million to buy your condos. Now they save S$150,000

Went to DBS bank to change @ RM 2.74 yesterday ( means the Money changer must have been RM 2.77 or 78. Very very nice feeling

Don't think RM 3 can be a reality as the Central bank up north will impose Capital control again. So I rather convert now then to wait.

I took a RM denominated mortgage in 2012 when the rate was 2.45. At today's rate, I estimated I saved over SGD20k and I've not even started paying my installment!

Malaysia Boleh! Dr M Boleh!

 

[hemohemo]

Weak ringgit sounds good to people with loan and gives them an opportunity and reason to drag the loan. But you end up paying more interest. If you save by paying off the loan more quickly, will the saving more than outweigh the weakening currency?

 

[Manhattan]

Nobody can predict the direction of the exchange rate, but someone with future loan payment can practice hedging. Say a sg dollar earner finds that the exchange rate is favorable today, he can exchange the rm today and put in a msia bank fixed deposit to earn 3-4% interest while waiting for the loan repayment to start. a simplistic example is you exchange today at 2.7 and put in a fixed deposit for 3 yrs, in 3 yrs time when you need to pay loan, it will be as good as you have exchanged the rm at 2.9. By doing hedging, you will always be the winner no matter which direction the exchange rate turn in the future.

 

[cow138]

That sounds like a very good idea

 

[FXHarvest]

Weak ringgit sounds good to people with loan and gives them an opportunity and reason to drag the loan. But you end up paying more interest. If you save by paying off the loan more quickly, will the saving more than outweigh the weakening currency?

I intend to pay off the loan ASAP rather than to drag for long term. My ringgit-based loan is on floating rate, and with the upcoming rate hike by Fed that will affect all floating rates worldwide, I reckon that this is a safer move as the rate hike might increase faster than the ringgit can depreciate.

 

[DCputeri]

Some Malaysian banks are already offering more than 4% pa FD. Can change MYR in small tranches to leverage on the peaking of SGD-MYR exchange rate each time and make FD placement. Can even claim for LD if there is delay in the project but hope no stalled project. The actual cost of the property can be easily 10-15% lower just on these strategies who does not take loan.

Nobody can predict the direction of the exchange rate, but someone with future loan payment can practice hedging. Say a sg dollar earner finds that the exchange rate is favorable today, he can exchange the rm today and put in a msia bank fixed deposit to earn 3-4% interest while waiting for the loan repayment to start. a simplistic example is you exchange today at 2.7 and put in a fixed deposit for 3 yrs, in 3 yrs time when you need to pay loan, it will be as good as you have exchanged the rm at 2.9. By doing hedging, you will always be the winner no matter which direction the exchange rate turn in the future.

 

[enjoylife77]

Reuters 2.8168

 

[Manhattan]

The rm is really in a bad shape. As a buyer it is happy hour because the actual cost of the purchased unit is deminishing. On the other hand, Will there be one point when the developer cannot tahan the escalating cost due to rapidly weakening rm? The cost of building will keep escalating because they need to pay more for the imported building materials. Some developer may go under.....

 

[RedsYNWA]

The rm is really in a bad shape. As a buyer it is happy hour because the actual cost of the purchased unit is deminishing. On the other hand, Will there be one point when the developer cannot tahan the escalating cost due to rapidly weakening rm? The cost of building will keep escalating because they need to pay more for the imported building materials. Some developer may go under.....

Its only an aggregate increase of 16.6% from 2.4 to 2.8. And this is probably over 3 years? Not a big impact to make the developer/main con go under.....

 

[Geminipegasus]

Wow. It is 2.80 now in Yahoo finance.

Wow, it's now 2.84
Anyone knows how is wuqi & crystal tiong?

 

[snowbird]

The rm is really in a bad shape. As a buyer it is happy hour because the actual cost of the purchased unit is deminishing. On the other hand, Will there be one point when the developer cannot tahan the escalating cost due to rapidly weakening rm? The cost of building will keep escalating because they need to pay more for the imported building materials. Some developer may go under.....

Developers going under?
Possible, if RM continue to depreciate further at the current speed.
Remember the last financial crisis and abandon projects all over, you may again get to see the similarities like that massive Kemayan City, Lot 1 Waterfront, etc.

 

[FHBH12]

Developers going under?
Possible, if RM continue to depreciate further at the current speed.
Remember the last financial crisis and abandon projects all over, you may again get to see the similarities like that massive Kemayan City, Lot 1 Waterfront, etc.

For projects that will still be built despite dearer import prices:

(a) Developers will cut the size of units but keeping to similar prices.
(b) Contractors and subcontractors will cut costs e.g. giving hollow tiles, lower quality paint etc.

 

[potter]

For projects that will still be built despite dearer import prices:

(a) Developers will cut the size of units but keeping to similar prices.
(b) Contractors and subcontractors will cut costs e.g. giving hollow tiles, lower quality paint etc.

+ hollow pillars. :p

 

[snowbird]

For projects that will still be built despite dearer import prices:

(a) Developers will cut the size of units but keeping to similar prices.
(b) Contractors and subcontractors will cut costs e.g. giving hollow tiles, lower quality paint etc.

While they can't easily change the unit sizes, in order to cut cost they will probably use lower quality materials for sanitary wares, floor and wall tiling, painting, woodwork and carpentry works, etc.

 

[sgcount]

Although as a buyer it is natural to think one is earning from the weakening RM, I'd like to consider the other point of view that the property being held is losing its value.

It may sound good news that you will be paying less for your property. But if you are investing it, the property value is actually dropping. Some point in time you got to collect rent or sell it. Given the extremely high oversupply (Iskandar), it is likely prices may adjust even lower in the years to come. So in addition to the dropping RM, there will be capital depreciation.

Even if one thinks the property is for self stay, then we are holding onto a liability (not asset) whose value continually drops.

The problem with the RM is that, it has never quite "beaten" the SGD convincingly over many years. The trend is a general downhill drop. Just look at the past 8-10 years of FX graph and you can see. Some are saying S$1=RM3 is not too faraway.

 

[enjoylife77]

Although as a buyer it is natural to think one is earning from the weakening RM, I'd like to consider the other point of view that the property being held is losing its value.

It may sound good news that you will be paying less for your property. But if you are investing it, the property value is actually dropping. Some point in time you got to collect rent or sell it. Given the extremely high oversupply (Iskandar), it is likely prices may adjust even lower in the years to come. So in addition to the dropping RM, there will be capital depreciation.

Even if one thinks the property is for self stay, then we are holding onto a liability (not asset) whose value continually drops.

The problem with the RM is that, it has never quite "beaten" the SGD convincingly over many years. The trend is a general downhill drop. Just look at the past 8-10 years of FX graph and you can see. Some are saying S$1=RM3 is not too faraway.

You made many sensible points for all to share. So have you disposed of your property yet?

 

[PuteriWorld]

It is losing in value if you have paid in full. Otherwise you should be smiling like most of us who need to take loans to repay the houses

Although as a buyer it is natural to think one is earning from the weakening RM, I'd like to consider the other point of view that the property being held is losing its value.

It may sound good news that you will be paying less for your property. But if you are investing it, the property value is actually dropping. Some point in time you got to collect rent or sell it. Given the extremely high oversupply (Iskandar), it is likely prices may adjust even lower in the years to come. So in addition to the dropping RM, there will be capital depreciation.

Even if one thinks the property is for self stay, then we are holding onto a liability (not asset) whose value continually drops.

The problem with the RM is that, it has never quite "beaten" the SGD convincingly over many years. The trend is a general downhill drop. Just look at the past 8-10 years of FX graph and you can see. Some are saying S$1=RM3 is not too faraway.