atans1

Ringgit, Rupiah got a lot more room to fall?

In Indonesia, Malaysia on 22/08/2015 at 6:20 am

Assuming if M’sia and Indonesia decide like Russia to keep government revenues the same in local currency terms, this would suggest that the Indonesian rupiah and Malaysian ringgit are both somewhat overvalued, even after falling to 17-year lows.

They would need to let their currencies weaken (in percentage terms) against the dollar by as much as the oil price has fallen. The Saudis (and other Arabs) do things differently. Because  they have foreign reserves that will last for years they peg their currency to the dollar.

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