The Singapore dollar has strengthened against the Malaysia ringgit again, hitting fresh highs of S$1 to RM3.5725 on Wednesday, Feb. 21 at 9:45am.

The previous record was S$1 to RM3.56 on Feb. 19.

The Singapore dollar has appreciated 8.05 per cent against the ringgit in the past year.

On Tuesday, Feb. 20, Malaysia's ringgit already fell 0.3 per cent to its lowest level since the Asian financial crisis meltdown on January 1998, to almost RM4.80 to US$1, Bloomberg reported.

The ringgit had suffered a more than 4 per cent drop already in 2024, due to poor export performance and rising U.S. interest rates.

Malaysia's central bank responds with statement

This prompted a response from Malaysia's central bank governor, Abdul Rasheed Ghaffour, who said in a statement on Tuesday reportedly to calm the markets: "The current level of the ringgit does not reflect the positive prospects of the Malaysian economy going forward."

He added that the currency's performance had been affected by "external factors", such as U.S. rate hikes, geopolitical concerns and uncertainty about China's economic prospects.

Expected growth in global trade and Malaysian exports should have a positive impact on the currency this year, he added.

The ringgit previously hit its lowest point since the Asian financial crisis in 2016.

That event eight years ago was the result of emerging market currencies being hammered by capital flight fuelled by an expected rise in U.S. interest rates.

Malaysia's second finance minister Amir Hamzah Azizan, in his maiden interview with Bernama state news agency on Monday, said he expected the currency to strengthen against the dollar after U.S. authorities signalled an end to rate hikes.

However, he refused to forecast the year-end target for the U.S. dollar-ringgit exchange rate.

"Apart from that, all the hard work that the prime minister and finance minister... have done to bring in foreign direct investments will also play a part in strengthening the local economy," he also said.

"This will surely improve the ringgit."

Top photo via Google