RM3.06 to S$1: M'sia ringgit strengthens to 5-year high against S'pore dollar

Malaysia's ringgit has hit a five-year high against the Singapore dollar, reaching RM3.06 per S$1 as of Mar. 18.

A check on Google Finance as at the time of writing shows the exchange rate hovering around RM3.07 and RM3.08 against S$1 in the past week, before hitting RM 3.06 in the morning of Mar. 18, the strongest rate since 2021.

The surge was supported by higher energy prices in light of the Middle East conflict as Malaysia is a net energy exporter, according to Bloomberg.

Optimism over artificial intelligence also reportedly contributed to the run of strength.

Strategists from Goldman Sachs Group predicted that the ringgit "should be one of the best performing currencies in Asia (again) this year".

"Given the disruption in the Strait of Hormuz, and likely higher liquid natural gas prices, we think Malaysia is best positioned in the region to weather a global energy shock," they said in a Mar. 14 note, reported Bloomberg.

According to the news outlet, as a net energy exporter, Malaysia's currency is supported by signs that Brent oil prices will remain high as the war rages on.

On the other hand, other regional economies, including Singapore, are net importers and have seen falling currencies as energy costs spike.

Malaysia has also seen a boost in foreign direct investment in AI and a GDP growth above the forecasted rate.

The ringgit saw a similar spike in recent months, reaching RM3.13 to S$1 on Jan. 23 and RM3.1 to S$1 on Jan. 28.

Top image via Mothership