SINGAPORE: This week, the Singapore dollar has posted a record high against the Malaysian Ringgit. On July 13 (Thursday), it reached SGD1 = RM3.47.
In May, the ascent of the Sing dollar against the Malaysian currency was already newsworthy when the rate was at S$1 to RM3.41, while in May 2022, it was at S$1 to RM3.20.
The ringgit has also dropped to its lowest rate in seven years against the British pound.
And while many Singaporeans may be rejoicing and packing their bags for trips across the Causeway, the ringgit’s decline toward a 24-year low is causing speculations that Bank Negara Malaysia, the country’s central bank, will step in.
“Another drop of almost 2 per cent will bring the currency to its 2022 low versus the dollar, which was the weakest level since 1998. Analysts say that may be the cue for BNM to make good on a pledge to prop up the ringgit — if it hasn’t already done so,” reads a July 10 Bloomberg article.
The ringgit has been the worst-performing currency in South East Asia for 2023.
“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, is quoted as saying in the South China Morning Post earlier this month.
Lower commodity prices are also one reason why the ringgit has been affected, including the price of palm oil, sweet crude and natural gas, which form a large portion of Malaysia’s shipments. /TISG