Friday, August 22, 2008

Our Central Bank President

In Malaysia, that is not easy be a President in the Central Bank, Because usually that appointment merely attached with politic issue or politic agenda. Hence, be appointing a good president become difficulty.

Recently and today, most of the major media in Malaysia. Claimed that She was made a wrong decision on interest rate policy. A lot of pressures forcing her immediately increase the current interest rate.

In my opinion, She had making a good and right decision on interest rate policy. Why?

I based on the two-reason support her decision: -

A) Increase rate spoilt the fundamental of economic. High cost equivalent to high production cost, indirect bring inflation out of control. Because in Malaysia, the inflation high on this period not due to demand increase or unreasonable purchasing power. So, if misused of manipulate the interest rate or misunderstand the basic of inflation will brings another impact on production cost. She is manage the right way to allow the economic fundamental maintain at stable level.
B) US dollar turns strong in this coming season. If now we increased the interest rate it will help those syndicate already realised profit share market and immediate transfer out from Malaysia. I think she is waiting the US dollar higher only increase the interest rate to prevent “hot money” immediately run away.

Apart of the above reasons, I believed she has another currency equipment. There is allows Malaysia currency trading in International market. So, it also may help IDD increase to minimise the outflow of trade.

Although media in Malaysia did not supported you. As a ordinary people in Malaysia, I will 100% support you policy interest based on the above 2 reasons.

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