24-10-2023 (SINGAPORE) The Singapore dollar hit an unprecedented high of 3.5086 against the Malaysian ringgit in the early hours of Tuesday, October 24. This surge triggered a flurry of activity at local money changers.
The exchange rate initially crossed the 3.5 mark at 10:21 pm on the preceding Monday. By 6:00 pm on Tuesday, it was trading at 3.5023.
In the afternoon on Tuesday at The Arcade in Raffles Place, AsiaOne observed that several money changers had displayed notices on their exchange boards indicating that they had exhausted their supply of Malaysian ringgit. This shortage was noted at approximately 4:00 pm.
However, at other money changers with available ringgit, long queues were forming. A spokesperson from City Money Changer informed AsiaOne that they had completely sold out their supply of Malaysian ringgit by noon, just two hours after opening their outlet at 10:00 am.
This staff member attributed the surge in demand for the Malaysian ringgit to a recent dip in its value and anticipated that this trend would persist. Some money changers who purchased ringgit at higher rates earlier would now be selling it at reduced prices due to the currency’s depreciation.
The staff member commented, “There will be buyers who will be awaiting the Malaysian ringgit to be sold at an even lower rate in the coming days.”
The depreciation of the ringgit against the Singapore dollar can be attributed to disparities in economic growth, inflation, and interest rate differentials, according to Dr. Liew Chee Yoong, an assistant professor of finance at UCSI University Malaysia, as reported by the New Straits Times. In the long term, this continuous depreciation may also influence corporate decisions by Singaporean firms regarding business operation locations, with the potential for increased investment in Malaysia as the cost of doing business becomes more economical.
This surge in the exchange rate has spurred considerable interest in currency markets and the ongoing economic dynamics between the two countries.
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