BNM's Forex Reserve and the MYR ...

Latest position on the reserve and the  value of the MYR is that the reserve as at 30 Nov 2007 stood at  RM 345.1 billion i.e. just about 100 billion USD ( an amount sufficient to finance 8.9 times of imports and 6.1 times of short term debts ) while the MYR forecast for year 2008 is RM 3.22 to RM 3.25 per one USD.

Now let us compare Malaysian IFR against some countries.

China 1,460 billion, Hong Kong & Macau 151

Japan 954.5

Russia 463.5

Euro countries 452.7

India 273.5

Taiwan 270.1

South Korea 261.9

Singapore 152.4

Brazil 170.1

Germany 125.6

Small countries like Singapore, Hong Kong & Macau, and Taiwan seem to be the the richest in the world.

New Year 2008

I did not celebrate the New Year at all, preferring to stay at home and watching the fireworks display from the apartment. When a few years ago, New Year eves were celebrated in the form of barbecue parties, now I have lost  interests in even acknowledging that they exist. I spend most of today playing chess in Yahoo and watching the History Channel on TV.

There are many good chess players in Yahoo even in the beginners' section.

The new year starts with a bang that rocks MCA. While the newspapers have yet to report, TV reports are mostly about an MCA Minister caught on tape having  illicit sex in a hotel in Johore Bahru. I heard that the Minister had admitted to being the one involved. 

Health Minister, Chua Soi Lek, bravely admitted that he was the one involved, also saying that he would not resign from his post in the govt. as well as in his party and that his family had accepted his apologies.

Shithole Hotel - The Claremont Hotel ..........

Sometime in October last year, I stayed in one of the shithole hotels in Singapore. Not that I cannot afford to stay in some of the better hotels, I was not aware that my visit to Singapore coincided with an ASEAN convention. All hotels in the city were apparently booked that I had no choice but to book (via the internet) in  a hotel called the Claremont Hotel that not even taxi drivers knew that it existed. 

It is really a shithole of a hotel with no proper bathroom. The room was small and it cost me S$ 195/++ for a 3-bedded room on the day that I checked in. Guests that checked-in on the ensuing  day had to pay S$ 260/++ for the same room. The management simply raised the price to exploit the situation. A room in a 5-star hotel, in KL and Bangkok cost even less. 

The only saving grace of the hotel was that it was directly located opposite Mustapha Mohamad Plaza where goods were sold at considerably lower price than anywhere else in Singapore and the surrounding area was jam free with an LRT station a few minutes walk away.

At the reception counter, I was attended to by Philipinos and Banglas who were slow in operating the computer.  It was entirely disorganised since they did not follow the booking that I made. It took the reception no less than 45 minutes before I could enter a room that was not promised. The 3-bedded room that I asked for was still occupied by an African guest who checked out only on the next day.

My advice to future guests is not to book this hotel because its management simply increase room tariffs on a whim.

Stagnating reserves and MYR value

Ahh ! It has been a long time since I last wrote in here. Though I don't have exact figures, the MYR has since "strenghtened" against the USD to RM 3.4 to 1 USD and in spite of the sky-rocketing oil prices, BNM has not increased its Forex reserves, hovering about 90 billion USD, not even once surpassing the "resistance level" of 100 billion USD. We are told by the local media of the ever increasing positive "balance of payments" the country enjoys, yet our MYR continues to weaken against the S$, Yen, Euro, Yuan, Baht, Swiss currencies. Only against the Rupiah does the MYR strengthen by a small margin.

Forex reserves of China, Singapore, Russia, India, Japan, Korea, Hong Kong, all increased, with China leading the pack with a reserve in the trillion of USD.

I am wondering now why BNM's forex reserve has not increased over the years ? Price of oil is now almost 100 USD per barrel and that Petronas is pumping 750,000 barrels per day or, as rumors have it, even 1.2 million barrels per day.  Before the year is out, oil experts the other day forecast that for 2008, oil prices would range between 80 to 90 USD per barrel. Petronas would then have no trouble in maintaining its high revenue throughout the year and . would increase BNM's coffers considerably in 2008.

But at the back of my mind, I doubt that its going to happen. At most, BNM's forex shall never exceed 100 Billion USD. It seems to me that Malaysia, unlike Singapore, is incapable of managing its funds. The unprecedented increases in the price of oil, and yes, palm oil, and other commodities such as rubber and tin, have apparently not much effects on BNM's coffers and the Malaysian currency. During the Mahathir era, I heard that the former PM has committed Petronas to sell its oil to Japan and Taiwan at 18 USD per barrel ! ( when oil prices were in the high 20's and 30's) in forward contracts lasting several years in order to fund the development of Putrajaya and other development schemes. Whether the rumours are true or that the contracts have expired or not, I have no idea at this time.

...............