The Singapore dollar has continued to appreciate against the ringgit as it hit a new record high of S$1 to RM3.50 on Wednesday, July 12, 2023.

The last time the Singapore dollar broke its record against the Malaysian ringgit as it touched 3.44 was on June 8 -- slightly more than four weeks ago.

As of July 13, the ringgit has recovered slightly to S$1 to RM3.47.

Malaysians working in Singapore cheering

Malaysians who cross the border to Singapore regularly to work are cheering the depreciation of the ringgit against the Sing dollar.

This is so as they are earning Singapore dollars here that can be exchanged for more ringgit by virtue of the favourable exchange rate.

Malaysia's central bank is expected to step in to stop the ringgit's slide -- it slid 5 per cent in the last three months -- and to stabilise the currency to manage its wild fluctuations.

Winners and losers

The ringgit's depreciation is expected to produce winners and losers.

Tourism in Johor, for example, is expected to see a boom in the short term.

Revenues could go up 5 per cent to 10 per cent.

Goods produced in Malaysia and exported overseas is expected to be more competitive as they become cheaper.

However, the weakening ringgit is costlier for the country as a whole as the cost of servicing external debt in foreign currencies, especially U.S. dollars, will increase as the ringgit plunges.

Top photo via Google