A Personal Finance Blog for Malaysian: Interest Rate and Currency Exchange Rate

Thursday, September 23, 2010

Interest Rate and Currency Exchange Rate

Click here for world major central bank's rate.

As we are living in the modern and globalised-world, our life are highly related (rather... be affected by) this two rates.

To understand why the highest and the lowest rate can differs so much (US and Japan almost 0.x% while Egypt 8.25% and South Africa 6.5%) - you much read more about the relationship between economy of a country and the national debt level etc. - which is far beyond this blog can write.

Suddenly we Malaysian feel good if we are buying things from oversea or paying USD for thing that we need or want. No extra effort or productivity cause that, simply because RM vs USD has been strengthen to a height since early 2008. Good for all imported goods, for the time being.

Those Malaysian (i.e. home in Malaysia), whom holding lots of cash in USD or £ or EURO will be worried on the amount of capital they have lost.

From personal finance point of view, do not hold too much foreign currency unless you have a mean for it e.g. you have expenses or payment to be made in USD and therefore you keep USD in hand.

Holding foreign currency on hand is almost equal to gambling as you don't know when it will up, when it will down. How long it will up and how long it will remained down.