Ringgitttttttttttttttttt…….Lookout below….

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Yesterday’s Malaysian Ringgit price action versus the US Dollar certainly caused a lot of concern for fellow Malaysian. If today’s price action holds, this means the weakness is confirmed unless there is an intervention by the Malaysian central bank. The Malaysian central bank claim to have intervene. Now here is the million dollar question. Since Malaysia does not have right to print money out of thin air like other SDR currency, so how did Malaysia’s central bank manage to simultaneously meddle in markets to support its currency and increase its foreign exchange reserves?

That intervention should have showed up in the country’s foreign-exchange reserves as a decline because the central bank would usually need to sell foreign currencies to purchase ringgit. Instead, the central bank said on Tuesday that its international reserves amounted to 407.8 billion ringgit, equivalent to $98.3 billion, as of November 15. That compared with the 405.5 billion ringgit, or $97.8 billion, it had as of October 31, according to a November 7 statement. According to reports, BNM didn’t immediately answer emailed requests for comment on the unusual rise in reserves. So where exactly did this money come from?

No matter what since current price still shows a very weak ringgit, Malaysian start protecting your wealth from further degeneration. Either protect your wealth with physical gold or start creating another source of income. If the weakness in ringgit continues, I would not be surprised to see the Ringgit testing the high of the financial crisis at 4.71.