Well here it is, below RM 3.00 to one US dollar!

Your guess is as good as mine or the rest out there. Early January 2011, there was a few economy consultants who has wrote and commented on the ringgit appreciation against the US dollar. Their views was that the RM 2.80 to RM 2.90 range against the US dollar was fair and reasonable.

Below is a chart from TheStar business news section dated 26th April 2011.

As seen the ringgit has strengthen the most among it regional peers since January 2011. This is a joy for some importers and most consumers. On the other side of the coin, is the others who claim that their exports will be more costly to countries like China and also countries in the Indochina.

Well there is always two sides of the coin;

(a) importers will also enjoy savings on raw materials and semi finished goods as their currency appreciate

(b) China yuan has slowly appreciated since June 2010 by 4.8% till todate against the US dollar, thus resulting in cheaper imports for the Chinese

(c) good news for those whom has held back on their holidays, now its cheaper to travel overseas

Backing off to year 1997/98 whilst I was in the franchising business before the Asian Financial crisis, the ringgit was at a level of RM 2.40 to one US dollar. Today with all the "printing" of dollars and the ever increasing national debt in the US to the tune of USD 14.1 trillion, of which they had recently approve another amount USD 60 billion for government spending/expenses for the 2010/2011 term. Other factors that cause the slip is the recent downgrading by S&P on the US sovereign outlook - their national debt is the key issue.

The dollar has depreciated against major currencies, the chart above is a consistent reflection of the US dollaor depreciation. Over the last decade, it has lost 40% of its value (dollar index).

In closing most major economies has already hike interest rates in an effort to reign in and control inflation, namely; China, India, South Korea,Taiwan, Indonesia and Thailand. So in this scenario a weak US dollar will be a blessing for the commodities industry whilst inflation is exported by the US; as the main or major exported of INFLATION!

Cheerio and till then!

Tj