As 2018 comes to the second month and with Lunar New Year approaching in as well, Malaysia currency is seeing a steady increase.
Last month on January 15, Ringgit Malaysia hit an 18-month high against the US dollar, trading at RM3.95 for USD$1 and today the rate stands at RM3.90.
When compared to Singapore dollar, our ringgit appreciated against the Singapore dollar to RM2.95, it reached a new height where the last time it recorded this rate was back in October 2016—it’s gone below RM3 mark for the first time in 14 months.
According to NST, Corp Head of Trading for Asia Pacific, Stephen Innes, said that the improvement is largely due to Malaysia’s strong export performance in the midst of rising crude oil prices.
Source: The Star
Seeing such a positive outlook on our ringgit, many Malaysians are starting to feel relief and able to break out from the financial struggle due to our weak currency but there are some people who aren’t happy about it.
Prior to this, our currency slump in recent years had benefited Malaysians and Singaporeans who worked in Singapore immensely due to their Singapore dollar-based salary. Because of that, Singapore dollar earners got to enjoy bigger spending power when snapping up ringgit from money changers and headed to Johor Bahru or other parts of Malaysia for shopping.
So much so that these commuters between Malaysia and Singapore had played a huge role in fueling Johor’s economy when our currency was at the lowest in recent years. Now that ringgit is no longer in the slump, some people have begun to think twice before making trips across the Causeway.
The Straits Times recently interviewed these frequent commuters to get a realistic reflection of the phenomenon. Among them, Danny Lee spoke against the improving ringgit exchange rate. Lee is a trader who makes frequent trips to Johor Bahru for food and shopping. He said he used to cross the Causeway at least once a month. The 53-year-old is now contemplating to cut back on the number of trips he makes to Malaysia because it may not be worthwhile anymore.
“If the ringgit continues to rise, then it will not be worth the amount of time and money needed to travel to Johor Bahru for food and shopping,” Lee said.
However, a Malaysian working in Singapore had spoken differently on the subject. Evelina Tam, a 26-year-old IT analyst working in Singapore said the conversion rate still remains attractive even if the ringgit gets stronger. “It doesn’t impact me in any way because, after all, the conversion rate is still high. Even if it drops to RM2.50 per SGD1, it is still a good rate. I am saving a lot and living comfortably.”
According to the daily, a Singaporean money changer added to the discussion saying that there’s a decrease of customers in exchanging Malaysian currency. Mohamed Rafeeq, the owner of Clifford Gems and Money Exchange at Raffles City mall, said that he saw a 30% drop in ringgit sales over the last three months. “The ringgit is getting stronger, so people don’t want to buy it… I’m hoping that it will get better,” Rafeeq told the daily.
But another money changer at Sim Lim Square begged to differ. Barakath admitted that business has slowed down lately but he believed it was only due to the post-holiday lull. As for a money changer at Arcade Plaza Traders, he revealed that the demand for ringgit hasn’t dropped.
The employee who wished to remain anonymous said: “Chinese New Year is coming, and a lot of Malaysians are working here in Singapore. So maybe, they need to change their savings into ringgit for Chinese New Year shopping. A lot of Singaporeans may also go to Malaysia for Chinese New Year shopping.”
Are you a frequent commuter between the two countries? If you are, let us know in the comments below on how the strengthening of ringgit has affected you.