Yes. It’s the time of the year again. Time to be 3.5x richer just a causeway away.
This time last year, experts predicted that the SGD would continue to grow stronger. Today, the dream has come true.
Just yesterday (24 Oct), the Singapore dollar has blown to an all-time high against the Malaysian ringgit.
Since the start of this year, the Malaysian ringgit has been recognised as one of the worst-performing currencies in Asia.
Just in June this year, MYR has plummeted to RM3.45 against SGD.
Now, it has officially fallen to RM3.5 against 1 SGD.
This is a nearly 9 per cent depreciation from 2022, and more than a 4.2 per cent decline since the beginning of 2023.
Singaporeans: *booking Grab buses to JB*
So, what happened?
MAS: “Aggressive” Policy ; Malaysia: “Aggressive” Push For China Trading
Here’s one of the reasons why the ringgit dream has been heard.
The Monetary Authority of Singapore (MAS) has been more aggressive on policy versus the Bank Negara Malaysia.
And here’s the thing: This year, Malaysia decided to curb their dependence on USD by being more “aggressive in the use of ringgit”, as mentioned by Malaysian Prime Minister Anwar Ibrahim.
And how did Malaysia achieve that?
By increasing their trade with their most significant trading partner, China.
And what happened after that?
Singapore Benefits From Steady Rise of USD
Bank of Singapore’s currency strategist Sim Moh Siong commented that the steady rise of USD due to rising US interest rate “has been exerting pressure on the ringgit”.
The whole world is already experiencing an economic slowdown because of the continued hikes in interest rates, but Malaysia just decided to run against the tide.
Meanwhile, SGD, the haven currency of Southeast Asia, remains resilient against the fluctuating USD.
Just for some comparison, the Japanese yen has dropped by approximately 25% against USD, while Philippine peso has plummeted by 15%, and the Thai baht similarly at 13%.
As for the 6% depreciation in SGD, it’s already not too bad.