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ATimes: Keunggulan M'sia Semakin Menghilang
By Kapal Berita

11/4/2001 7:05 pm Wed


Masalah kawalan matawang kini menggugat ekspot dan prestasi saham di Malaysia - atau dengan kata lain - ekonomi Malaysia. Kesemua matawang serantau merosot negatif kecuali Taiwan akibat pergolakkan ekonomi Amerika dan kemelut politik dan ekonomi di Jepun. Malaysia yang menetapkan nilai matawang sedang terumbang tetapi Cina masih dapat bertahan kerana kos tenaga buruhnya yang lebih murah serta permintaan domestiknya yang amat tinggi itu dapat mengimbangi.

Tetapi jika nilai yen merosot ke paras 130, negara Cina mungkin akan menilai semula matawang yuan. Jika ini berlaku ia akan menyebabkan ekonomi di sini terjejas lebih teruk lagi. Krisis ini menunjukkan bukan Soros yang menjadi penentu sebagaimana yang sering dituduh berkali, tetapi negara Cinalah yang amat berpengaruh sekali. Ia sudah menjadi satu kuasa ekonomi yang disegani kerana Jepun kini sudah tersungkur oleh kancah politik dan ekonomi yang teramat kronik.

Cina akan menyedut semua FDI dari rantau ini kerana kelebihannya yang tersendiri seperti sikap keterbukaan kepada WTO, nilai yuan yang kompetetif, tenaga buruh mahir yang murah dan iklim pelaburan yang stabil.


Bagaimana dengan Malaysia? Mahathir terlalu berdegil mahu menjaga kroni walaupun sektor industri sudah sakit sehingga FMM dan wakil peniaga Cina mencadangkan agar ringgit dinilai semula. Ekspot negara dan saham syarikat menjadi lebih mahal dan tidak kompetetif. Kewibawaan Malaysia kini sudah semakin terpudar pada kacamata pelabur luar. Ringgit kini amat tertekan kerana tidak dapat bersaing dengan baik di pasaran. Yen sudah mencecah paras krisis ekonomi dua tahun sudah, Baht mencecah paras 3 tahun terendah, manakala $Singapura di paras tahun 1990. Mungkin akan sampai ketika ringgit sudah tidak tahan kerana tiada sesiapa pun akan mahu membeli sesuatu yang mahal tetapi tak sepadan.

Mahathir sedang terjerat oleh kedegilannya. Jika ringgit dinilai semula dia akan malu tidak terhingga kerana wawasannya tidak bertahan lama dan kredibilitinya hancur berkecai jadinya.

Tetapi jika ringgit dikekalkan, negara akan muflis lebih segera kerana kuasa wang semakin tiada. Sebab itulah Mahathir mahu memesatkan industri perlancungan ketika ini untuk mendapatkan tukaran wang. Tetapi setakat manakah beliau akan dapat bertahan kerana tidak ramai orang yang kesusahan akan berjalan..... lihat sahaja litar Sepang - lebih banyak kerusi daripada orang!

-TJr Kapal Berita-

Asia Times
10th April 2001

Asean: No swaps, no nothing

It must have been quite a scene when the finance ministers of the Association of Southeast Asian Nations (Asean) met with finance officials from China, Japan, and South Korea in Kuala Lumpur over the weekend to work out details of a proposed network of bilateral swap arrangements and repurchase pacts - the Chiang Mai Initiative, named after the Thai city where it was mooted last May.

After a two-year respite, the East Asian currencies - with the exception of the Taiwan dollar and those enjoying fixed-rate protection - are once again in deep trouble (see table below).

Percentage losses against US dollar since January 1 (as of April 5)

Japan -8.0
South Korea -6.1
China - (fixed rate)
Hong Kong - (fixed rate)
Taiwan +0.6
Indonesia -10.2
Malaysia - (fixed rate)
Philippines -0.8
Singapore -4.2
Thailand -4.9
Australia -16.8

[There have been similar regional currency slides this week as Japan's yen dropped to its lowest level against the US dollar in two and half years, dragging down most other regional currencies. The Singapore dollar dropped to its lowest value against the dollar since 1990, and the Thai baht hit a three-year low. - Kalinga Seneviratne ]

The Thai and Korean central banks intervened last week to support their currencies. And with export growth well down throughout the region and current accounts in danger of moving into the red, the Chinese and Malaysian dollar pegs are increasingly coming under pressure. There is talk that China will give serious consideration to yuan devaluation if the Japanese yen continues its fall to below 130 to 140 to the dollar. Malaysian exporters are clamoring for a lower ringgit.

So, yes, there was some reason for the "Asean plus 3" officials to see what could be done to agree to mechanisms to put to work to fend off possible speculative attacks and to carry out short-term stabilization maneuvers, especially making use of the massive foreign exchange reserves of China, Japan and Korea. But after two days of haggling, ministers were little nearer to agreement than when they started their sessions. As had been the case in the run-up to the meetings, the issue of whether the International Monetary Fund (IMF) should supervise disbursements proved the stumbling block. Speaking to reporters when it was all over, Malaysian Finance Minister Daim Zainuddin said, "We are not under IMF. Our view is that the facilities must be better than IMF. If it is the same as IMF, then we might as well go to IMF."

In the end, ministers agreed only that there should be an agreement, but saying individual countries should be left to negotiate their own terms with each other.

We can't disagree with Daim; but we disagree with the tenor of the whole Chiang Mai Initiative. Its underlying assumption that currency crises are caused by speculators (the old Mahathir saw) is just plain wrong and temporary stabilization efforts are only as good as accompanying commitments to address underlying causes. And, indeed, if the political will had existed to do so, there was plenty of time over the past two years to get on with it.

The reason why currency markets have knocked the yen back down to levels of the crisis year of 1998 accurately reflects the miserable state of the Japanese economy and lack of political will to fix it. And as the yen has gone, so have most other Asian currencies - and for the same reasons. The ministers and central bankers convening in the Malaysian capital might rather more usefully have concentrated their combined efforts on agreeing policy measures capable of dealing with the root causes of the regional financial woes than in chasing George Soros's shadow.

The most imminent danger now is that political uncertainties in leaderless Japan and failure to rid the banking system of its bad loan mess will drive the Japanese yen down further against the dollar. Chatri Sophonpanich, the chairman of Bangkok Bank, Southeast Asia's largest, warned last week that if the slide of the yen reached 130 to the dollar, China might have to devalue to protect its export competitiveness, and that this would send new shockwaves throughout the region's economies.

As we wrote a few weeks back [Asian Crisis Diary, Vol 2], our bet now is that this (yuan devaluation) won't happen unless the yen goes into free fall. Malaysian Trade Minister Rafidah Aziz, addressing the opening session of the Pacific Basin Economic Council's (PBEB) annual international general meeting in Tokyo on Sunday, observed that, "Over the longer term, an economically weak Japan will be hampered in assuming a leadership role to provide the impetus for regional economic growth. The 21st Century will in all probability see China taking over the leadership mantle from Japan and wielding influence in the region." China will protect that strategic opportunity.


April 10:

Emerging Market Risks:

Malaysia's Political Risks Threaten USD Peg

Location: New York Author: Prerak Zaveri, RiskCenter Legal

Correspondent Date: Tuesday, April 10, 2001

Will Malaysia succumb to political risks and cease its currency's peg to the US dollar?

That is the issue faced by risk managers dealing with South East Asia's volatility. The problem is that it will be psychological, as opposed to economic, information that will drive the decision. The Malaysian government has pledged support for the peg, which means it could lose credibility on both domestic and international fronts, if it changes its policy.

While, officially, Malaysia has recently repeated pledges to stand by its USD/MYR peg, installed over 2-1/2 years ago, widespread regional currency weakness and especially the Japanese yen's 2-1/2-year low against the U.S. dollar, have increased the competitive pressure for the Malaysian currency and put strains on Malaysia's export-oriented economy. As a result, growth in manufacturing output eased to a 23-month low of 4.3 percent year-over-year in February, fueling concern it could get worse in the coming months. That fact could ignite domestic unrest against government policies.

"However, the future of the peg is tied up as much in politics as in economics," said a risk analyst in Frankfurt. "The peg was and is part of the Malaysian prime minister's economic-policy strategy. Although Malaysia could now blame it (change of the currency regime) on further devaluations in the region and the US recession, we, on balance, still expect the MYR peg to hold in the current year. However, the situation has to be monitored closely."

KL reserves hit by $1.6b paper loss in first quarter

Deficit reflects the volatility of international currencies in recent weeks, says Bank Negara

By Reme Ahmad

MALAYSIA says it has suffered a paper loss of US$900 million (S$1.64 billion) in its international reserves during the first three months of this year, which reduced total reserves to US$27.2 billion.

The paper loss for the quarter compared with a total for the whole of last year of US$1.4 billion. The reserves have declined in the last 10 months and at the end of March were US$7 billion lower than at the end of May last year.

Bank Negara said in a statement yesterday that the deficit reflected 'the volatility of international currencies in recent weeks'.

The US$27.2 billion reserves at the end of last month showed a drop of US$1.5 billion when compared to reserves of US$28.7 billion a fortnight earlier.

The level of reserves is adequate to finance about four months of retained imports and is 5.9 times the short-term external debt.

The reserves remain 'usable and unencumbered', it said.

Against the level in mid-March, reserves at end-March were affected by the unrealised revaluation loss following the quarterly exchange rate revaluation of the central bank's reserves, Bank Negara said.

In the light of the appreciation of the US dollar and the diversified currency composition of the international reserves of Bank Negara, the value of the quarterly reserves revaluation resulted in a decline in reserves of US$900 million, it added.

Economists in Kuala Lumpur said they were not too worried by the decline as the Malaysian central bank was simply 'marking-to-market' its holdings. The revaluation of reserves is carried out every quarter.

They were, however, more concerned about the resilience of the economy and the stability of the ringgit peg to the US dollar in the light of the continued fall in reserves.

The ratio of foreign currencies that make up the reserves are known only to the central bank.

But economists expect a big portion of the holdings to be in yen, based on trade patterns.

So, if the yen depreciated it would be a loss when the holdings were translated into dollars, said Mayban Securities economist Zulkifli Hamzah.

The yen is trading around its lowest level to the US dollar in 2 1/2 years.

Bank Negara said the shortfall of another US$600 million was caused by higher import payments for goods, services and transfers and portfolio outflows.

Taking up the cudgels against the doomsayers who see the fall of the reserves as negative for the economy, Bank Negara said that although falls in the second quarter of last year were due to the outflow of funds from stock market investors - a valid point of worry - the subsequent drops were due to a mix of factors.

These included higher overseas investments by Malaysian companies, repayment of external loans, payments for services and transfers as well as revaluation losses.

Last year, overseas investments by Malaysians amounted to US$2 billion. The amount is estimated at US$200 million in the first quarter of this year.

The central bank argued that rather than being a sign of weakness, the international forays of local companies represented foreign assets still owned by Malaysians.