The Singapore dollar has continued to strengthen against the Malaysia ringgit, hitting fresh highs of S$1 to RM3.56 on Monday, Feb. 19 at about 10am.
The previous record was S$1 to RM3.5505 on Feb. 15.
The Singapore dollar has appreciated 7.27 per cent against the ringgit in the past year.
At 10:06am on Feb. 19, the Singapore dollar was up 0.15 per cent from Feb. 16’s close.
This also sees the ringgit at its weakest against the US dollar as it approaches the 1998 record low.
The Malaysian ringgit is about 2 per cent away from reaching RM4.8850 to US$1, an all-time low level last seen in 1998 when the Asian financial crisis ravaged the region’s currencies, according to Bloomberg.
The ringgit had hit 4.7958 against the US dollar in October 2023, the weakest since 1998.
Reasons
According to Bloomberg, the persistent US dollar strength and China’s floundering economy is hurting the Southeast Asian nation’s exports, which declined for a 10th consecutive month in December.
A fall in exports have also weighed on Malaysia’s economic growth.
There have also been concerns over political stability following alleged attempts to bring down prime minister Anwar Ibrahim’s administration.
Bank Negara Malaysia’s ability to maintain interest rates and support the currency should the greenback’s strength prevail as investors pare bets on United States Federal Reserve rate cuts will be made clearer in inflation data released this coming week.
Most analysts are forecasting a stronger ringgit though by the end of 2024 as Malaysia’s economic growth gains momentum.
Top photo via Google