Ringgit opens lower versus greenback, improves against Singapore dollar

MALAYSIA: The ringgit opened slightly lower against the US dollar today as the greenback strengthened following the release of the latest Federal Open Market Committee (FOMC) minutes, which signalled that a potential interest rate hike remains on the table.

At 8 a.m., the ringgit eased to 3.8965/3.9160 against the US dollar, compared with 3.8945/3.9055 at Monday’s close.

Bank Muamalat Malaysia Bhd chief economist Afzanizam Rashid said the US Dollar Index (DXY) rose 0.57% to 97.712 points after the FOMC minutes showed that several policymakers preferred a “two-sided” description of the committee’s decision.

“This situation suggested that raising the interest rate could be a possible outcome should inflation remain above target level,” he said, as quoted by Free Malaysia Today, citing Bernama.

Ringgit strengthens against Singapore dollar

While the ringgit edged lower against the US dollar, it strengthened against the Singapore dollar. This is a development that Singaporeans who frequently travel across the Causeway should closely watch.

The ringgit improved to 3.0746/3.0905 against the Singapore dollar, compared with 3.0860/3.0949 previously. Additionally, the value of the ringgit against the Singapore dollar has been steadily rising, as previously reported by The Independent Singapore.

Although the movement appears modest, a firmer ringgit means Singapore dollars convert into slightly fewer Malaysian ringgit. For frequent visitors to Johor Bahru, this translates into marginally higher effective costs for shopping, dining, fuel and other expenses.

For many Singaporeans, the exchange rate is a key factor in deciding how often to cross into Johor. When the ringgit strengthens, the cost advantage narrows, potentially dampening the appeal of spontaneous cross-border trips.

Businesses in Johor that rely heavily on Singaporean spending may also feel the impact if the exchange rate trend continues to favour the ringgit.

Mixed performance against other currencies

At the opening, the ringgit traded higher against a basket of major currencies. It appreciated against the Japanese yen to 2.5191/2.5318 from 2.5356/2.5430, strengthened versus the euro to 4.5936/4.6166 from 4.6204/4.6335, and rose against the British pound to 5.2583/5.2846 from 5.3137/5.3287.

Against other ASEAN currencies, the ringgit also traded mostly higher. It gained versus the Thai baht to 12.4640/12.5364 from 12.5205/12.5619, and edged up against the Indonesian rupiah to 230.7/232.0 from 231.4/232.2.

However, the local note slipped slightly against the Philippine peso to 6.73/6.77 from 6.71/6.74 at the previous close.

For Singaporeans watching the currency markets, the ringgit’s steady strengthening against the Singapore dollar may not yet signal a dramatic shift. However, even incremental movements can eventually add up for regular Causeway commuters, especially in a climate where cross-border travel remains a routine part of life.

Read also: Ringgit strengthens after strong Malaysian GDP data — What it could mean for Singapore