“Locals are being priced out, which is hard for them and businesses that are also dependent on local customers,” the secretary of the Johor Indian Muslim Entrepreneurs Association says
SINGAPORE: The Singapore dollar has been unprecedentedly strong against the Malaysian ringgit, a bonus for Singaporeans, as it has allowed the dollar to stretch further than ever for food and shopping trips across the border to Johor Bahru.
This has been good news for businesses in JB, particularly on weekends, but has also meant trouble for locals, who are finding themselves priced out in their own turf, reports say.
Mr Hussein Ibrahim, the secretary of the Johor Indian Muslim Entrepreneurs Association, was quoted in The Star as saying, “We are currently seeing a 15 per cent increase in Singaporean customers at our restaurants, money changers, and even petrol stations. The current exchange rate favours the Singapore dollar compared to the ringgit, which encourages Singaporeans and those working there to come here to do their shopping and dining as it is very affordable to them.”
Nevertheless, he expressed the hope that authorities will address the situation at the soonest possible time out of concerns for ringgit-earning locals, whose spending power has been cut due to the tanking ringgit. The currency of Malaysia has been the poorest performing in Asia, second only to Japan, due to a number of factors.
Mr Ibrahim said, “The cost of living in the Johor Baru area has gone up. Locals are being priced out, which is hard for them and businesses that are also dependent on local customers.”
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On Oct 24, the Singapore dollar recorded an all-time high against the Malaysian ringgit when it reached MYR3.5086 to S$1. The ringgit has recovered slightly since then and is now at MYR3.45 to S$1.
Last month, the ringgit fell to its lowest level in the 25 years since the Asian financial crisis (1997-1998). The rising US dollar caused the ringgit to drop 0.3 per cent to MYR4.7635 per US$1, its lowest rate since 1998.
This year, the currency has dropped by more than 8 per cent against the US dollar. Bloomberg noted on Oct 18 that in the past six months through August, Malaysia has consistently posted lower export numbers. This is due, at least in part, to an economic slowdown in China, which is the Southeast Asian country’s biggest trading partner.
“While Malaysia is not alone in experiencing sizeable currency depreciation against the US dollar, its steeper decline versus its Asean peers could be attributed to its higher exposure to the Chinese economy and renminbi movements,” said Yeah Kim Leng, an economics professor at Malaysia’s Sunway University, in a report published by the South China Morning Post earlier this year.
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