UK pound down....

[Smallworld]

I just checked the exchange rates on google and it says:

1GBP - 16793 IDR

I remember when I came to Indonesia 2012 Sept I got 1 GBP to 15 000 IDR. Now it is only 1800 rp more.

USD is oscillating around 13 000 rp mark but it is rather steady comparing to GBP currency downfall.

 

[waarmstrong]

The Rupiah Strengthened a bit, dropping below 13,000 to the USD.

 

[sumyunggai]

There have been a couple of events here basically.

First is GBP/US$

This was in the $1.80 - $2 range between about 2004 and 2008.

During this time $1 = around 9,000 IDR

So this gave an exchange rate of around 16,000-18,000

The pound then fell to just above the $1.40 mark in early 2009 before recovering to a band around $1.50-$1.70 between 2009 and 2014, after which time it fell to around $1.45 just before the Brexit vote in June. The Brexit vote brought a more-or-less immediate 10% haircut for the pound and it's remained about $1.30 since then.

The 9,000 mark at which the rupiah was defended by Bank Indonesia was abandoned around 2012, and there was a more-or-less continuous steady decline to around 14,700 in September 2015. This was the rupiah's low point as the Bank re-established a target of 13,000 IDR which knocked the rate down to 13,700 fairly swiftly and in 2016 actually down to more-or-less the 13,000 mark.

In the post-Brexit period the rupiah has gained a relatively insignificant 2% against the dollar, but over the longer term a strengthening of the rupiah of at least 10% and a weakening of the pound by at least the same figure means that those holding sterling are looking at cost increases of 20-25% in Indonesia in the recent past.

Yes, £1 = 16,800 was seen only in August of 2013, that's 3 years ago, but since that time a lot of things have got significantly more expensive in rupiah terms.

 

[waarmstrong]

...In the post-Brexit period the rupiah has gained a relatively insignificant 2% against the dollar...

In the ForX market 2% in not chickenfeed, but alas when the Fed raises interest rates, probably during the Christmas holiday season, the Rupiah is likely to give up most of any remaining gains against the dollar.

 

[Scooterindo]

I so rarely use GBP these days - I am like a tourist in London having to examine the notes for value before handing them over.

 

[waarmstrong]

I so rarely use GBP these days - I am like a tourist in London having to examine the notes for value before handing them over.

"For value" ??? Aren't they all pretty near worthless these days?

ps Panin Bank's closing buy rate on the Rupiah per USD is 12,920; on the GBP its 16,663. (9/28/2016)

 

[Davita]

Earlier this year, thinking of the result of the Brexit referendum, I became a little concerned about my UK£ savings from my UK Old Age Pension...so I bought IDR at 20,000 around May/June and fixed it in a deposit @ 6% net. of tax.

That pension has now lost 15% of its buying power in Bali, where I spend most of that money.
I wish now I'd transferred more UK investments to some other currency

 

[Smallworld]

On the bright side now it's a good time to do shopping in UK (go for a visit, shopping ....who knows maybe buy property in a buy-to-let scheme).

My father-in-law said (in 2013)..... "don't look how much you GBP you get or loose.... if you have all your funds based in Indonesia and live in Indonesia you are not a part of currency exchange turmoil. But if you wish in the future to go back to UK then yes ... you may be affected by the exchange rate".

I also remember that I said to in-laws that UK will exit EU they said it was not possible. This is the reason why I went through the route of UK citizenship. Just in case Indonesia will not work out. It is good to know to have few places you can call home just in case (and I will quote Scooter here) "when the shit will hit the fan".

 

[Davita]

On the bright side now it's a good time to do shopping in UK (go for a visit, shopping ....who knows maybe buy property in a buy-to-let scheme).

My father-in-law said (in 2013)..... "don't look how much you GBP you get or loose.... if you have all your funds based in Indonesia and live in Indonesia you are not a part of currency exchange turmoil. But if you wish in the future to go back to UK then yes ... you may be affected by the exchange rate".

I also remember that I said to in-laws that UK will exit EU they said it was not possible. This is the reason why I went through the route of UK citizenship. Just in case Indonesia will not work out. It is good to know to have few places you can call home just in case (and I will quote Scooter here) "when the shit will hit the fan".

All your points above are correct.....it is easy to boast about winning investment strategies and humiliating to acknowledge losses...and on-one knows the future.
That is why nearly all financial planners advocate diversity, which I pursue.
However, I agree with your F-in-L in that one should assess where one lives, and spends most money, and have sufficient funds to continue that situation and prevent debt.
Savings/investments should be so diversified to enable the (wtshtf) scenario.
This may mean it cannot always be a winning strategy.

 

[Smallworld]

All your points above are correct.....it is easy to boast about winning investment strategies and humiliating to acknowledge losses...and on-one knows the future.
That is why nearly all financial planners advocate diversity, which I pursue.
However, I agree with your F-in-L in that one should assess where one lives, and spends most money, and have sufficient funds to continue that situation and prevent debt.
Savings/investments should be so diversified to enable the (wtshtf) scenario.
This may mean it cannot always be a winning strategy.

To be able to invest / save you need in first place money to play with. Take a risk / be prepared in case of loosing it all. Many people don't have this luxury.

I still remember my first days in UK working hard each day (12 hrs shifts) +SAT+SUN together with my co-worker.
My co-worker got this whole beautiful idea of becoming high flying financial person and live/work in London. To live from setting up stop loss/gain in laptop with few clicks. So she started to learn how to invest in stocks. She was going to some "learn how to trade" seminars and each day was talking all the time about shares, economy ect. Nevertheless to say that she bought the software, books, cds and all that crap from those "wining strategy" high flying people in finance. I still remember like it was today: I asked her " if it was really such a great "always winning idea" why would those people sell it or teach other making them their competitors, they would probably keep it to themselves and get more money each day". I vague remember the answer. But I was not convinced. It was something about ninja trading (quick buy/sell). Going to the end of the story: Her loss was £10000-12000 of her savings. For a simple blue collar immigrant worker living by herself I can say it was A LOT. This together with her mother passing away (about that time) + bf leaving + having all dreams crushed with life reality ..... I am very impressed how she managed to handle it all. She is never giving up.

 

[Anglian]

Not a financial expert, but I'm wondering what the Collapse of the German DB would have on world money markets, their shares don't seem to hot at the moment, hard to say if Herr Merkal is bothered or not

 

[jstar]

Deutsche Bank seems to have a deal with the US on the fine. Stock price is going up again.

In fact the original statement is not really correct: UK Pound going down [sic].

It's a bit more complicated than that. The Indonesian Rupiah is always calculated via the US Dollar.

So you can not really say there is a (direct one on one) rate GPB/IDR or EUR/IDR. Even if those are strong currencies. So these rates are calculated via an intermediate.
GBP <-> USD <-> IDR

That means that it could be the rate between two currencies looks steady, but that the volatility is leveraged. For instance; the rupiah strengthens against the dollar, while the pound weakens against the dollar. Then it seems the rate between pound and rupiah is stable. Or you will get more rupiah for your euro, since the euro strengthens against the dollar and the rupiah stays stable.

 

[Anglian]

Quite amazing really, faceless men juggling away,. I once invested $500 in Forex, made $3000, quite amazing, I paid the dealer0.5% per month, it went well for a while then the dealer advised me the money rates had become unstable and withdraw my money, I got my $500 back, it's a gambol, but if it pays off your on to a winner

 

[Smallworld]

Not a financial expert, but I'm wondering what the Collapse of the German DB would have on world money markets, their shares don't seem to hot at the moment, hard to say if Herr Merkal is bothered or not

From tv (BBC news) I heard (from one of the analytics's comments) "...they are too big to collapse".

If they would collapse well EU would split into tiny pieces it would trigger Greek's banks and Italian's banks collapse which would amplify the whole crisis effect. Some EU members would loose their trust into German Banking system (as well as EU banks). Those countries which have EURO as currency would be mostly affected. Those countries which have their own central bank with their own currency would not be as much affected by the whole crisis.

 

[Smallworld]

And it continues to fall.....

1 British Pound equals
16653.22 Indonesian Rupiah

I wonder how GBP to IDR exchange will look in last days of March... April ... May 2017.

 

[jstar]

^
The period you mention is exactly when the Brexit talks should take place so that could be some volatility. Teresa May stated the UK will start the divorce with the EU before March. So now investors fear 'hard' negotiations without many concessions.

As said before, it is the GBP vs the USD that you 'feel' over here. And the IDR is pretty strong against the USD lately.

The GBP has reached the lowest level against EUR in three years btw.

 

[Davita]

And it continues to fall.....

1 British Pound equals
16653.22 Indonesian Rupiah

I wonder how GBP to IDR exchange will look in last days of March... April ... May 2017.

With the UK now committed to exit EU by the end of March it is likely the UK£ will remain vulnerable.
What the IDR will do is any-one's guess. I cannot think anything on the horizon to topple the IDR and, if there is more success news re: Tax Amnesty, it's possible to rise in value, which isn't what the gov't wants, as they recently reduced the interest rate to control inflation.

It will probably depend on Sec. Yellen increasing the USA interest rate before any more action will be taken by the BOI.

 

[Smallworld]

It would be much better to compare GBP to USD before UK joined EU and today. I am also puzzled to see Euro hasn't been affected that much. UK is the 4th largest country which contribute to EU pot. Now the news about German biggest bank problems... It is going to be interesting to see how EU will manage year 2017-2019.

As for currency downfall got this from MSN website:

"Sterling hovered near 31-year lows on Monday after Theresa May announced the Government will trigger Article 50 by March next year."

 

[jstar]

With the UK now committed to exit EU by the end of March....

The want to start the negotiations before April. The process itself could take years.


About the EU; don't forget the UK has always been considered a difficult child. They wanted exceptions in everything. So many (i.e. France and Germany) are not so unhappy about a Brexit.

Also, many companies have an important presence there; their European HQ or financial- or research centers are often in the UK. (Esp. London of course.) These companies' rationale is: Why would we stay in this (very expensive) location if the majority of our affiliates and business are on the mainland? Esp. if there will be no free trade zone anymore. For German car manufacturers etc. it could be the other way around; assembly in the UK. The thing is, nobody really knows till the negotiations are finished.

 

[Davita]

The want to start the negotiations before April. The process itself could take years.

Once article 50 is invoked it must be completed in 2 years max ...i.e. March 2019. ​The longer it takes the more volatile will be the UK currency and other UK markets.