MYR: Ups & Downs

No doubt the downtrodden value of MYR against USD sparked an endless chain of finger-pointings, with every major news site featuring an MYR watch round-the-clock.

At time of writing, 1 USD = 4.08 MYR

Many people have settled on blaming the instability of the political landscape as the villain of this plunge. Still, others who are more directly involved in the national economy are optimistic that what we are seeing is merely a destined contractionary phase of a healthy business cycle. With the issue having thrived for quite some time, many observations can be noted, though I have limited myself to penning just three of these (note that these are just observations and by no means reflect my conclusion on the matter as I am not qualified to draw any, do pardon my amateur tone on the subject):

1. Confidence and expectations are very important when we talk about economics. Thus, having the news reporting every now and then about the deteriorating value of MYR will, more often than not, throw away any remaining confidence of the people who possess the Ringgit. It is of no surprise that when households are served with such news, they will be very much tempted to dispose of the Ringgit in favour of other currencies. This reduces the demand for MYR, and its price in the foreign exchange market. With weak demand comes negative expectations among investors and consumers, further bringing down the Ringgit's value and this will set off a no-confidence cycle.

2. That said, most Malaysians need not concern themselves with the plunge since they do not directly trade in terms of USD. Therefore, the unrest is really unnecessary since the weakening of Ringgit does not reduce their purchasing power of most products. As a matter of fact, purchasing domestic products and services have a healing power on MYR: Enthusiastic spending on domestic products allows more capital to be channelled in bettering the quality of our exported products, thus increasing their competitiveness in the international market. This will encourage more exports and the demand for MYR will then increase. Besides, the growth in GDP (sadly, I am not confident to talk about economic development here) also helps to offset the effect of our weakening currency since increased incomes ensure that we can purchase the same amount of goods and services. It is noteworthy to say that we have not descried any significant boom in our inflation rate, which would have nullified the effect of growing GDP.

3. The fact that the value of MYR fluctuates against other larger currencies shows that we are still very dependent on commodities that cannot secure stable global market prices. Following the fall of demand for oil and gas, Malaysia, being one of the countries supplying these commodities face the problem of having to succumb to the volatile global demand. However, this situation can be improved if the nation starts to contribute to the global intellectual property market and move towards an idea-and-service-based economy. As someone puts it: "It is high time that Malaysia transforms from the world's factory into the world's laboratory."

Indeed, no one can say for sure how long this problem will persist. However, as a nation that went through centuries of hardships to earn our own independence, we can definitely use some optimism...

Bane of the Press

In an era where many headlines generously shower the limelight on allegedly scandalous motives, a vast make-up of the populace will elect their maladroit opinions, which are conceived by their subconscious confusion, as their primary stance without much hesitation. Once a news about any particular wrongdoing spreads through the media, many readers will begin to brandish the worst of profanities and judgemental remarks against the defendant(s) without giving it a fair share of cogitation. With a little spark proposed by the introduction of seemingly immoral acts of the subjects in the headlines, journalists benefit from the ignition of hate speech and censure because it means more stories to sell. What were supposed to be simple news are skilfully twisted to tug at the sentiments of the readers.

Without exercising caution when consuming these writings, readers are then easily manipulated to act as expected by the press: Expressing anger and absolute disaccord. With the accumulation of these sentiments, the press is now ready to completely blow things out of proportion. This is done by involving the readers in the stories, creating a situation in which the readers are brainwashed into believing that they are directly influenced in a negative manner by the 'wrongdoings'. It is a pity that many readers fall prey to this dirty tactic of some press. They rely fully on the information published by the press without making sure that the facts would actually add up. 

Knowing that the 'bandwagon effect' is very much alive and at work, it is extremely effortless for the press to extract concentrated anger and discontent from the readers. They just need to know which words to use to make the embers burst into wild flame. While the sentiments continue to build up, they only have to kick back and wait for the next big collision to happen for them to pen. 

I would like to clarify that I have nothing against the press. However, since they are also human, they are not impervious to errors, or even in some cases, deliberate misconducts. They pledge that they will uphold the integrity of journalism, and scream at the top of their voices to go against any attempt of censorship and scrutiny, citing freedom of speech. Their largest pool of supporters? The readers. Little do these supporters know that they are mistaking prevention of lies for liberty of expression. In the end, the fates of the defendants and readers lie in the hands of these irresponsible journalists, who are eternally prepared to articulate and distort whatever statement they could yank from their victims, to conjure disagreements out of thin air, and to govern the thoughts of the people. 

p/s: I am merely expressing my views on some press companies, not the entire journalism world.