SINGAPORE: The Singapore dollar hit an all-time high of S$1 to RM3.53 against the Malaysian ringgit on Wednesday, Dec 13. However, it fell back S$1 to RM3.51 on Dec 14 and Dec 15.
Prior to December 2023, the Singapore Dollar had reached the previous high of S$1 to RM3.5 on a few occasions in July, October and November. An article on Bloomberg cited that the ringgit was weighed down by weaker exports and its widening rate differential with the US. The local dollar was supported by previous rounds of policy tightening. It added that the Bank Negara Malaysia paused interest-rate hikes in July. Earlier this year, the ringgit also dropped to its lowest rate in seven years against the British pound.
In the second quarter of 2023, Malaysia’s GDP growth reached its lowest point in almost two years, registering an annualised rate of just 2.9%. Adding to Malaysia’s economic concerns is that its largest trading partner, China, is also experiencing economic weaknesses. This has led to a continuous decline in Malaysian exports over seven consecutive months, with the trend extending through September 2023.
The primary factors behind this decline in exports are the slowing global demand for electronics and falling commodity prices. Malaysia specialises in producing and exporting these goods, particularly in the oil and gas sector. When global demand for electronics weakens, and commodity prices drop, it directly affects Malaysia’s export revenues. As a result of these economic challenges, the MYR has also weakened.
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.
While the SGD is currently trading at an all-time high against the MYR, this could change in 2024 based on a number of factors, an article on Dollars and Sense reported. For example, if China’s economy improves and the US Federal Reserve cuts interest rates, the MYR could make up some ground against the SGD. /TISG
Read related: SG$1 = MYR3.50 — Singapore dollar all-time high against Malaysian Ringgit: What’s happened?
The post S$1 to RM3.53: Singapore dollar hits all-time high against Malaysia ringgit appeared first on The Independent Singapore News – Latest Breaking News