Last Thursday, China's Reminbi or Yuan and Malaysian ringgit depeg with US Dollar.
Before that, Oriental Daily reported that China has sent its central bank's official to IMF to study how Singapore's government manage their currency and its foreign reserve basket.
Meanwhile, Chinese version of Asia Week, Yazhou Zhoukan reported that Chinese government might appreciate their currency 5% to peg with Hongkong Currency and to create a single currency with Hong Kong.
Eventually, the news prove that Oriental Daily is correct. China government adopted Singapore method rather than Hong Kong one.
Malaysia government is a follower rather than leading what has happen. Singapore government prove successfully manage it currency during Asia Financial Crisis. With China adopting Singapore method. Malaysia central bank, as a follower has no choice but have to follow as well.
With Brunei currency peg with Singapore for more than 2 decade. And the fact that new leader in both Singapore and Malaysia can work well together. It might be appear that at least 4 countries currency in Asia can peg together eventually. ie: China, Singapore, Brunai and Malaysia.
Prior to Asia Financial Crisis. Malaysia Ringgit is an acceptable currency in Indonesia and Philippine as a large population in both of the above country work in Malaysia and Singapore as a foreign labor and maid. Thus, Ringgit might be popular again in both country, together with Singapore Currency.
If Ringgit Malaysia become an acceptable currency again in Indonesia and Philippine after the de-pegn. We would have six countries in Asia using a single currency.ie China, Singapore, Brunei, Malaysia, Indonesia and Philippine.
If Thailand evetually adopted the Singapore method as well. The whole Asean + 1 will be using a Single currency. As Thai Bath is also an acceptable currency in Indochina country like Cambodia, Vietnam, Laos and Myanmar.
Close proximity between Hong Kong and China resulting both countries currency acceptable by people in one another territory. Thus, we able to add one more country. It is only difficult to predict how the other 3 Asia country currency: Korea, Japan and Taiwan is heading?
The depeg has send KLSE composite index to 5 Years high. Those who jump on the Rooster Year bandwagon at the beginning of the year get burn terribly. However, with the currency depeg. The real Rooster bull is just in the begining. This is an opportunity in 12 years you unable to miss. If you are skeptical because you get burn at the beginning of the year. I can guarantee that you will regret at the end of the year.
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