Ringgit Malaysia Case Study

2308 Words10 Pages
1.0 Introduction The exchange rate is defined as the currency of a country mentioned in the other country 's currency. For example, the Malaysian Ringgit currency referred to in the United States Dollar, Singapore Dollar, Thai Baht, Indonesian Rupiah, Japanese Yen and other currencies again. The currency of a country is determined by the supply and demand of the country 's own currency. When individuals or foreign firms buying Malaysian goods, the supply of foreign currency to be converted to Ringgit Malaysia occurred. Similarly, when an individual or firm Malaysia wants to buy foreign goods or services, the demand for foreign currency will be accepted. Foreign exchange is also intended as a currency of a country that is held by the…show more content…
Request Ringgit Malaysia as the Foreign Exchange depending on the demand of foreigners for goods and services and the desire of foreigners to keep their Malaysian Ringgit as cash or deposits to buy real estate, stocks, bonds and other assets in Malaysia. Selling Malaysian Ringgit depends on the wishes of consumers, firms and the government convert Malaysian Ringgit their foreign currency. This situation depends on the demand of Malaysia to foreign goods and a desire to change Malaysian Ringgit Malaysia to the foreign currency to buy real estate, stocks, bonds and other assets in other countries. When the lower value of the Ringgit Malaysia in terms of the US dollar, the lower the cost of buying Malaysian goods by the United States Dollars. For example, the current price of a Proton Wira made in Malaysia is RM50, 000. If the current exchange rate is US $ 0.4 for every Ringgit Malaysia (or RM2.50 = US $ 1), a resident of the United States will pay US $ 20,000 to buy the car. Say the current exchange rate is US $ 0.2 for every Ringgit Malaysia (or RM5.00 = US $ 1), then the population of the United States will need to pay US $ 10,000 for the car. Means lower prices Malaysian Ringgit in terms of foreign currency, the lower the prices of goods, services, assets and Malaysia in terms of foreign currency. Next what is supposed to happen is that more Malaysian products may also request that the state has increased the value of the currency? The demand curve for foreign currency…show more content…
When the advantages of buying property in Brazil is more favourable than the purchase of assets from other countries, the demand for Malaysian Ringgit to make such investments will increase, thereby causing an increase in the value of the Ringgit Malaysia. At the same time the population will be more interested in making investments in stocks and real estate as compared to the foreign country. This will cause the supply of Ringgit falls and enhance the value of the Ringgit Malaysia. 2.3 Interest Rate in Malaysia Compared With In Other Countries Willingness of foreigners to hold property in terms of Ringgit Malaysia depends on the interest rate that can be obtained from the properties stored in terms of the Malaysian Ringgit. The higher the interest rate, the higher also the demand by foreigners to keep their property in Malaysia in terms of Ringgit Malaysia. This situation will ultimately increase the value of the Ringgit Malaysia. For Malaysians, the higher interest rates will lead to Malaysian investors are more interested in saving their money in a financial institution in the

More about Ringgit Malaysia Case Study

Open Document