Dear Government of Malaysia,

Why are all the hard-earned monies transferred from producers and consumers to local and foreign banks because of currency volatility and currency hedging activities? Are there any real benefits?

Why are consumers and real businesses made to pay millions and millions for all the costs and profits arising from local and foreign banks' foreign exchange operations? Is this productive?

Why are consumers and real businesses incurring burdensome administrative costs to maintain continued capital controls, when there is no primary essence after the de-peg (the whole purpose of having capital controls is to fix the exchange rate).

Before 2005, millions of red-tape administrative costs were justified with the peg in place; consumers and businesses gain from not having to take on exchange rate losses and exchange rate hedging costs.

Why did the government not provide any signals or information to consumers and (the exporting) businesses of Malaysia during the sudden de-peg policy change. This, however, was communicated to the banks (to prepare for administrative matters) before July 2005 and they are now draining monies out of real businesses. If there are concerns over currency speculation risks, then why tell it to the financial sector who are primary speculators?

How do you expect that manufacturers (who are real foreign exchange contributors, employment opportunity contributors and GDP contributors to the country) to absorb the 5%-8% exchange rate appreciation out of the marginal <5% competitive net profits. This with the open competition against China, Mexico and India. And besides having to invest annually in R&D.

Why do commercial banks sell unessential forward exchange contracts. When the spot exchange rate was at 3.77 in the third quarter last year, banks offered a six-months forward at 3.70-3.72. This will eliminate exchange rate volatility by fixing it at 3.71.

However, real businesses will have to agree to confirm an upfront exchange rate loss of 2.5% from fixing into the forward contract at 3.72. Worse, actual spot exchange rate after six months was 3.74 with businesses ending up losing on a ostensibly beneficial forward contract.

Is this all a gambling business? Is this a taxing of non-core businesses especially of SMIs who do not have regional US dollar cash management resources when compared to MNCs?

And why are continuing capital controls giving payments restriction to companies in Malaysia?