Last Updated on 2022-11-05 , 3:31 pm
Many Singaporeans are flocking to Malaysia despite the long snaking queues at the custom. The main reason? It is a place where they feel three times richer and a place with lots of good food too.
Now, there is a chance you will feel even richer as a Singaporean, as the Malaysian currency is expected to fall slightly against the Singapore dollar.
Maybe four times richer, soon?
Here, let a cat explain everything in Singlish:
@goodyfeed SGD$1 to RM4 soon? #sgtiktok #tiktoksg #fyp #foryourpage #singapore ♬ original sound – Goody Feed
Experts Say Soon, SG$1 will be RM3.45 As SGD Continues to Grow Stronger
The currency is expected to reach a new low of RM3.35 to RM3.45 range against the Singapore dollar, if ringgit volatility rises sharply and the Singapore dollar remains resilient, according to Maybank chief forex strategist Saktiandi Supaat.
Thanks to the Monetary Authority of Singapore (MAS), the Singapore dollar has outperformed Asian currencies due to them tightening their monetary policy five times over the past 12 months.
This also explains why Singapore currency has appreciated against currencies such as the Thai Baht, Korean Won and Japan Yen.
On the other hand, Singapore dollar has weakened by about 4.7 per cent against the US dollar over the past year, which is considered a good performance given that US currency appreciated to about 18 per cent.
The Singapore central bank uses the exchange rate as its main policy tool to counter imported inflation concerns, whereas Malaysia manages monetary policy through the interest rate.
Many economists project Malaysia’s central bank, Bank Negara, to raise their interest rates by a quarter point to 2.75 per cent to cope with inflation and support their weakening currency.
Malaysia ringgit is expected to weaken further against USD
USD is currently at its strongest since the early 2000s against other major currencies.
The ringgit is likely to hit 5.00 against the US dollar in the next six months, which is the lowest in the record.
The exchange rate is currently US$1 to RM4.74 now and is predicted to hit RM4.90 by the end of 2022.
The main reason is because of the increase in interest rates and stronger economic growth in USA, which weakens the ringgit. The US dollar has strengthened by about 13.7 per cent against the ringgit on 1 November 2022.
Economists anticipate the US central bank to raise their interest rates by three-quarters of a percentage point and reach 5 per cent by March 2023.
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