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Tuesday, July 26, 2005

The impact of change: from fixed rate to managed float (2)

The banking system in Malaysia is flooded with cash. The short term interest rate dipped!

The changes in the first few days under the new managed float regime was voletile. Overnight repo interest rates drop to approximately 2.00% - 2.10% from approximately 2.20% - 2.65%. Too much cash in the system, that will at least last for a short while I guess. Many have repatriated back their overseas money back to Ringgit Malaysia.

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