SINGAPORE: One Singapore dollar fetched 3.56 Malaysian ringgit at the beginning of 2024.
The Singapore dollar fetched less — 3.22 Malaysian ringgit — on Thursday (September 12).
After tumbling in a free-fall last year, the Malaysian ringgit has seen a substantial rebound and is currently the best-performing currency in Asia as it has risen by 5.3 per cent over a 12-month period.
Last month, both the ringgit and the Singdollar reached an 18-month high against the US dollar.
However, the ringgit has grown strong not only against the US but also the Singapore dollar.
On Thursday (Sept 12), finance blog Dollars & Sense wrote that the ringgit has “steeply appreciated” by more than 4.5 per cent since mid-July.
After a worrying downward spiral since mid-2023, the Malaysian ringgit rallied in early August, hitting a multi-month high on Aug 7.
In May this year, the currency reached a 26-year low of US$1 to RM4.78. By early August, however, it had climbed back to US$1 to RM4.42 as Malaysia’s economic performance improved.
The ringgit’s surge is largely driven by Malaysia’s economic performance, which has defied the expectations of economists.
Advance estimates for Malaysia’s second-quarter growth are pegged at 5.8 per cent year on year, the highest quarterly increase since the last quarter of 2022.
In comparison, growth in the previous quarter was only at 4.2 per cent year-on-year.
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Dollars & Sense noted that Malaysia’s economic growth has been observed in many sectors, from manufacturing to consumption.
Industry experts are now projecting GDP growth to be at about 5 per cent for the year.
The blog added that the Malaysian economy’s accelerated growth, together with the static Singapore economy, caused the ringgit to grow against the Singdollar in the past two months.
This does not mean, however, that the Singapore dollar is doing poorly, as it has also appreciated against the US dollar of late, by almost 3 per cent since mid-July.
On Wednesday (Sept 11), reports said that economists have upgraded their projections for the city-state’s 2024 growth, noting better-than-expected external growth.
Twenty-one economists surveyed by the Monetary Authority of Singapore (MAS) pegged economic growth for this year to be at 2.6 per cent, which is higher than polls from March and June. For next year, meanwhile, economic growth has been forecast to be 2.5 per cent. /TISG
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