The Singapore dollar hit a historic high of S$1 to RM3.53 against the Malaysian Ringgit on Wednesday, Dec. 13.

It then fell to S$1 to RM3.51 on Dec. 14.

According to Google, the Singapore Dollar saw an upward trend after it fell from S$1 to RM3.50 on Dec. 3.

Prior to December 2023, the Singapore Dollar had reached the level of S$1 to RM3.5 on a few occasions in July, October and November.

Ringgit's value against the U.S. dollar fell on Dec. 13

According to The News Straits Times (NST), the ringgit had fallen to a level of US$1 to RM4.7 on Dec. 13, as a result of two factors.

One factor is the fall in oil prices following the release of data on inflation in the U.S, according to SPI Asset Management managing director, Stephen Innes.

According to CNBC, data showed that inflation rose by 0.1 per cent in November from October, which is higher than expected as economists had expected prices to remain unchanged.

Oil prices fell by more than three per cent following the release of the data.

The second factor is how such data suggests that the U.S. Federal Reserve will not lower its interest rates within the first quarter of 2024, NST further quoted Innes as saying.

Currently, the Federal Reserve has set interest rates in the U.S. at 5.25 per cent to 5.5 per cent, according to Reuters.

The rates were left unchanged following a meeting on Dec. 13.

These two factors are "big negative drivers", Innes said.

Drop in ringgit came a day after Cabinet reshuffle

The drop in the ringgit also came a day after Malaysian Prime Minister Anwar Ibrahim announced a Cabinet reshuffle, which included a new finance minister.

Innes was further quoted as saying:

"There is always a bit of political instability risk when foreign investors view (a) Cabinet reshuffle."

Local investors are better in tune with Malaysia politics, but outsiders not so much."

Top left photo via Google, right photo via Polina Tankilevitch/Pexels