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As the Singapore dollar strengthened against the Malaysian ringgit, hitting a recent high of S$1 to RM3.41, prompting many to change currency and some money changers to run low on stocks of Ringgit, in some cases running out completely.

Running out of ringgit

Lianhe Zaobao reported on May 26 that money changers in and around The Arcade at Raffle Place were estimating an increase in the number of customers of at least 10 to 30 per cent.

This comes as the exchange rate between the Singaporean dollar and the Malaysian Ringgit exceeded S$1 to RM3.40 for several days.

On May 24, the exchange rate was at S$1 to RM3.41, with Zaobao reporting it at S$1 to RM3.42 on May 25.

As of time of writing, the exchange rate is S$1 to RM3.40.

One money changer Lianhe Zaobao spoke to, City Money Changer, said that they were able to offer S$1 to RM3.37, but that rate still attracted more people to exchange currency.

By 5pm on May 25 they said they had run out of stock of ringgit.

Another money changer, All Best Remittance Centre, located at Woodlands MRT Station, reported 10 per cent more customers than usual as well.

They also expressed concern that they might not be able to provide customers with a good exchange rate, as the currency was tight in the market.

Likely compounding the demand for ringgit is the onset of the June school holidays, with several families likely planning to head to Malaysia to visit relatives or go on holiday.

Lianhe Zaobao reported All Best Remittance Centre saying that school holidays usually see an increase in customers by 20 per cent.

Cabinet meeting

The ringgit has been performing poorly in general, something that Bloomberg attributes to concerns over the sustainability of China's economic outlook, as well as oil prices.

Free Malaysia Today also reported that Malaysia's Deputy Finance Minister Ahmad Maslan had said that the Malaysian government was meeting with officials from Malaysia's central bank, Bank Negara Malaysia (BNM), to discuss strategies to deal with the "continuous decline in the value of the ringgit".

Maslan said that the decline in the value of the ringgit was due to uncertainty surrounding the United State's debt ceiling negotiations, as Malaysia's currency reached a six-month low against the U.S. dollar.

Maslan also said that the Malaysian government would "leave it to BNM" to strategise so that "this matter doesn't get worse".

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Top image via Mothership