When the Ringgit (RM) dropped to an all-time low against the Singapore Dollar (SGD), Singaporeans, in their natural kiasu state of being, rushed to local money changers to make every dollar exchange worth more.
It got so intense that it reportedly caused a shortage of RM among the Singaporean money changers.
The Falling Value of Ringgit
In economic theory, the decrease of currency’s value is usually seen as a bad thing, because it says a lot about the state of a country’s economy compared to the others.
However, that is not to say that there aren’t any benefits to depreciating currency values, or that it has never been a fiscal policy employed by governments to make their country more appealing to foreign investments and business set-ups.
It is cheaper after all.
A sliver lining on a cloud, really.
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Johor Minister Looking on the Bright Side
For the newly appointed Menteri Besar (MB) or Chief Minister of Johor, Datuk Onn Hafiz Ghazi, he sees the decrease of the RM’s value compared to the SGD as something that will benefit small businesses and traders.
Especially after they’ve been deprived of their usual influx of foreign customers when the Singapore-Johor borders closed during the COVID-19 pandemic.
In an interview with Sinar Harian, Mr Onn Hafiz posited that the lowered value of Rm to SGD will encourage more Singaporeans to come and spend in Malaysia.
He’s definitely right on that count, considering the high number of travellers departing from Singapore to Malaysia during Good Friday and this long weekend/holiday.
Additionally, Singaporeans have a higher buying power due to the strength of their own domestic currency, which will make them more inclined to spend their money in Johor.
Therefore, the devaluation of the RM is insignificant compared to the amount of business that Singaporeans will bring to Johor and its local traders.
Mr Onn Hafiz also mentioned that the issues with inflation and currency exchange rate are only temporary, and asked Malaysians to join in prayers and hope that it won’t last too long.
I’m not sure how religious faith can affect market trends or the state of the economy, but whatever makes you sleep well at night, I guess.
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Featured Image: Utusan Malaysia & Shutterstock (Nawadoln)
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