Ringgit Is Strengthening But Not Everyone Is Happy About It
The rise in the ringgit against the Singapore dollar has affected some consumers and money changers.
By Tang Ruxyn — 18 Jan 2018, 01:00 PM
Ringgit has been soaring of late
The Malaysian currency hit a 18-month high against the US dollar on Monday, 15 January, while it recently appreciated against the Singapore dollar to RM2.99 - the highest level which was last seen in October 2016 - and going below the RM3 mark for the first time in 14 months.
Corp Head of Trading for Asia Pacific, Stephen Innes, has attributed the ringgit's positive outlook to Malaysia's strong export performance in the midst of rising crude oil prices.
The positive outlook of the ringgit is a welcome change for many Malaysians who have struggled because of the weak ringgit
In the midst of the ringgit slump in recent years, Malaysians and Singaporeans working in Singapore were able to benefit from the situation as they have a bigger spending power thanks to their Singapore dollar-based salary.
These people are able to stretch their dollar even further when snapping up ringgit from money changers and they head to Johor Bahru or other parts of Malaysia.
In fact, these commuters between Malaysia and Singapore coupled with the weak ringgit were said to have played a huge role in fuelling Johor's thriving economic growth.
However, it appears that things are about to change as some people have begun to think twice about making trips across the Causeway
Danny Lee is a trader who has been making frequent trips - at least once a month - to Johor Bahru for food and shopping.
In wake of the recent strengthening of the ringgit, the 53-year-old is contemplating to cut back on the number of trips he makes since 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," said Lee, as reported by The Straits Times.
Customers have also been shying away from the Malaysian currency, according to a Singaporean money changer
The Straits Times reported a Singaporean money changer as saying that the store has been seeing a decline in demand for the ringgit as the it gets stronger.
Mohamed Rafeeq, the owner of Clifford Gems and Money Exchange at Raffles City mall said that sales of the ringgit have gone down by 30% in 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 was quoted as saying.
Despite this, it is still not a gloomy outlook as some money changers have better experiences
The money changer at Sim Lim Square admitted that business has slowed down lately but store operator, Barakath, said that this was probably due to the post-holiday lull.
Meanwhile, a money changer at Arcade Plaza Traders revealed that the demand for ringgit has not dropped.
"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," said an employee who wished to remain anonymous.
As with the money changers, not all consumers are deeply affected by the recent surge in the value of ringgit against the Singapore dollar
Evelina Tan, a 26-year-old Malaysian working in Singapore as an IT analyst told The Straits Times that the conversion rate 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."
Do you think the surge of ringgit is a good or bad development? Let us know your thoughts in the comment section below.