Update 5 Aug 2024: S’pore Dollar now equates to RM3.34 as M’sian Ringgit strengthens on economic recovery
Ringgit rose as much as 2.3% on 5 Aug — Singdollar was trading at RM3.568 on 20 Feb 2024 & RM3.34 on 5 Aug 2024
Singaporeans planning to go to Malaysia during the upcoming long weekend should take note that the Singapore dollar may not stretch as far as it used to.
After years of weakening, the Malaysian Ringgit has strengthened as the country rides a wave of economic optimism. As of the time of writing, S$1 was equivalent to RM3.34, according to Google Finance.
The Ringgit rose as much as 2.3% on Monday (5 Aug), according to Bloomberg. This was its biggest gain since October 2015 — almost nine years ago.
Ringgit rally continues, rises to 4.42 against US dollar at the close
The local currency hit its high of 4.3945 on 5 Aug 2024 against 4.79 on 20 Feb 2024
The ringgit extended its bullish momentum from last week to close higher against the US dollar today amid a weakened US Dollar Index (DXY), an analyst said. According to Bloomberg, the ringgit rose the most in nine years amid optimism surrounding Malaysia's economy, rising by 1.57 per cent against the greenback by the close of trading.
At 6 pm, the ringgit climbed to 4.4240/4305 versus the greenback from Friday's close of 4.4945/4995. The local currency hit its intraday high of 4.3945 at 11.46 am and opened at an intraday low of 4.4970. Bank Muamalat Malaysia Bhd chief economist Dr Mohd Afzanizam Abdul Rashid said the ringgit continued to gain against the US dollar and broke through its immediate support at 4.4005 in the early session but retreated in the afternoon session.
He said the weaker-than-expected United States (US) nonfarm payroll (NFP) data at 114,000 in July compared to the expectation of 175,000 seems to have opened up the path for weak dollars. "The next question is about how low will the Federal Reserve cut the rates and this will hinge upon the health of the US economy.
Malaysian Ringgit falls to lowest level in 26 years
The Singdollar was trading at RM3.568 as of 7pm on 20 Feb 2024
Malaysia's ringgit hit its lowest level since the Asian financial crisis on Tuesday (Feb 20), as emerging Asian currencies suffered against the dollar. In trade on Tuesday, the Malaysian ringgit fell nearly 0.3 per cent to almost 4.8 against the greenback, its worst reading since January 1998 during the Asian financial meltdown. The currency had suffered a more than 4 per cent drop already this year, thanks in part to poor export performance and rising US interest rates.
Malaysia's central bank governor Datuk Abdul Rasheed Ghaffour said on Tuesday that the currency's performance had been affected by "external factors" such as US rate hikes, geopolitical concerns and uncertainty about China's economic prospects. "The current level of the ringgit does not reflect the positive prospects of the Malaysian economy going forward," he said in a statement. He said expected growth in global trade and Malaysian exports should have a positive impact on the currency this year.
The ringgit had previously hit its lowest point since the Asian financial crisis in 2016, when emerging-market currencies were hammered by capital flight fuelled by an expected rise in US interest rates. Malaysia's second finance minister Amir Hamzah Azizan told state news agency Bernama on Monday he expected the currency to strengthen against the dollar after US authorities signalled an end to rate hikes. "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 said. "This will surely improve the ringgit."
Ringgit tanks to 26-year low; central bank maintains economic prospects remain positive
Malaysia’s central bank said the ringgit – which on Tuesday (Feb 20) fell to its lowest level since the Asian financial crisis 26 years ago – did not reflect the “positive prospects” of the Malaysian economy going forward.
The beleaguered currency momentarily slipped below 4.80 against the US dollar to 4.79, the weakest it has been since plunging to an all-time low of 4.8850 in 1998. Since Jan 1 this year, the ringgit has fallen by more than 4 per cent against the greenback as China’s slower than expected economic recovery continues to dent exports from Malaysia.
Against the Singdollar, the ringgit traded at RM3.568 at 8 pm on Tuesday, extending its record low. The ringgit has depreciated by 2.6 per cent against the Singdollar since Jan 1. In the last decade alone, the ringgit has plunged by over 37 per cent since the point when one Singapore dollar could buy RM2.60.
Ringgit’s Fall to 26-Year Low Sparks Central Bank Verbal Reply
The ringgit extended declines to its lowest level since the Asian financial crisis, prompting Malaysia’s central bank to say it doesn’t reflect the improving outlook for the economy. The local currency briefly slipped past 4.8 against the dollar on Tuesday, its weakest level since reaching an all-time low of 4.8850 in 1998. The ringgit has slid by over 4% so far in 2024 as China’s sluggish economy hurts exports from Malaysia, adding to the currency’s losses from the previous three years.
“BNM is of the view that the current level of the ringgit does not reflect the positive prospects of the Malaysian economy going forward,” Bank Negara Malaysia Governor Abdul Rasheed Ghaffour said in a statement Tuesday. “The recent performance of the ringgit, similar to other regional currencies, has been influenced by external factors.” A rebound in external demand and strong domestic spending will drive growth this year, Abdul Rasheed said. Malaysia’s exports have shown “steady” improvement since the fourth quarter, and the International Monetary Fund predicts global trade will pick up this year, he said. The nation’s exports in January grew by 8.7% year-on-year, ending 10 consecutive months of contraction. The tourism industry has “recovered strongly” and arrivals in 2024 are likely to exceed the pre-pandemic level of 26 million, the governor said. Investment momentum has picked up with the implementation of approved projects both in the private and public sectors, he said.
“Reflecting these positive developments and the government’s commitment to implement structural reforms and the expected lowering of interest rates in advanced economies, most analysts are forecasting for the ringgit to appreciate this year,” Abdul Rasheed said. Traders will be watching the latest inflation print due Friday, which will give clues on Bank Negara Malaysia’s ability to maintain interest rates. The ringgit closed 0.2% lower at 4.7987 per dollar in Kuala Lumpur.
Malaysia companies braced for costly fallout as ringgit hits 26-year low
The ringgit last week slipped past 4.8 against the US dollar, the weakest level since January 1998, during the height of the Asian financial crisis. PHOTO: LIANHE ZAOBAO FILE
Malaysian businesses are paying a high price for their country’s weak currency, which is making importing materials and servicing foreign debt more costly. With the ringgit hitting a 26-year low, industries from airlines to raw material-intensive sectors are particularly at risk, according to S&P Global Ratings.
The ringgit has slid to its lowest level since the Asian financial crisis in the late 1990s, and the government has assigned the central bank to closely monitor the currency, Malaysian Prime Minister Anwar Ibrahim said on Feb 23. Malaysia’s central bank said on Feb 27 that the ringgit is undervalued and should be trading higher on account of the country’s positive economic fundamentals and prospects. Bank Negara Malaysia governor Abdul Rasheed Ghaffour said in a statement that the central bank has stepped up engagements with government-linked investment companies, government-linked firms, corporations and investors to encourage continuous inflows to the foreign exchange market.
“Given Malaysia’s positive economic fundamentals and prospects, the ringgit ought to be traded higher,” he said. The ringgit last week slipped past 4.8 against the United States dollar, the weakest level since January 1998, during the height of the Asian financial crisis. It strengthened slightly to 4.779 against the dollar by 1.04pm on Feb 27 and was trading at 3.5552 against the Singapore dollar.
