Wednesday, 5 August 2015

Pressure on ringgit remains unabated

At RM3.85 to the US dollar, the selling pressure on the ringgit remains unabated on the back of two probable developments – first, the widely speculated put option that traders had gone into a few months ago offering RM4 for every US dollar.

The second is the arbitrage difference between the non-deliverable forward (NDF) ringgit offshore contract versus the onshore ringgit forward contract.

As of yesterday, the one-month NDF offshore had an implied yield of 8.2% versus the onshore forward yield of 3.2%.

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