China unpeg the yuan.. finally!

k4korny SG

After intense pressure from her trading partners, China cut its currency's link to the U.S. dollar and revalued the yuan against a basket of currencies. The government also lifted the value of the currency by more than 2% to 8.11 yuan per dollar; the dollar traded at 8.2765 yuan overnight.

Letting the yuan strengthen may help President Hu Jintao control inflation
by reducing the cost of imported products such as oil and copper, which
are priced in US dollars. It also gives the Chinese central bank, which has sold yuan to prevent the currency from appreciating, more scope to increase interest rates to cool an economy that expanded 9.5 percent in the first quarter.

"Clearly, it will be more effective if you combine currency and
interest-rate policies," Mr Uwe Parpart, Bank of America's senior market
strategist in Hong Kong, said before today's announcement. "China wants to slow inflation and growth. Raising rates and the value of
the currency both push things in that direction."

Malaysia also announced Thursday it was dropping its own policy tying its currency, the ringgit, to the U.S. dollar and would adopt a currency basket arrangement similar to China's. Hong Kong said it would keep its currency peg to the U.S. dollar, making it the only Asian economy left with such a link.

The effect on U.S. financial markets was immediate: The dollar fell against other major currencies and yields on U.S. Treasury securities rose. If that rise in interest rates is sustained, it could make it more expensive for U.S. consumers to finance purchases of new cars, homes and other big-ticket items.
(Various Sources)

Revaluing from 8.11 yuan per dollar to 8.2765 is 'peanuts'! Laughing
But nonetheless, this is a small step for China but a big step for the rest of the world, as it will make imports to the chinese markets cheaper.

k4korny SG

Tg Pelepas port expects to see record traffic
source: BT August 1, 2005

De-pegging of ringgit may spell lower costs for the port: CEO

(SINGAPORE) Malaysia's Port of Tanjung Pelepas, which is competing with Singapore for South-east Asia's sea freight, expects to handle a record number of containers this year, helped by lower rates and increased trade.

Land, labour and other costs at Malaysia's second-largest port is at least 30 per cent lower than at 'major' competitors, chief executive Mohd Sidik Shaik Osman, 56, said in an interview at the port in southern Malaysia's Johor state.

...

The ringgit has appreciated 1.3 per cent against the US dollar since the central bank announced it would remove the peg.

Tanjung Pelepas's container volumes last year accounted for 36 per cent of the total 11.1 million processed at Malaysia's major ports, according to the Ministry of Transport. About 90 per cent of containers handled at Tanjung Pelepas are for transshipment.

Maersk purchased a 30 per cent stake in Tanjung Pelepas in 2000 when the shipping line moved its operations to the Malaysian port from Singapore. About 70 per cent of traffic at Tanjung Pelepas port comes from Maersk, Mr Mohd Sidik said.

Tanjung Pelepas, which has eight berths of 360 metres each in length, processed 2.08 million containers in the first half of this year, 3.4 per cent more than a year earlier.

The port operator earlier said it's expanding container yard capacity by 40 per cent to 154,000 twenty-foot containers by the second half of this year. It is currently building two additional berths. - Bloomberg