Singapore economy is so strong that it has impacted our currency and the ringgit downfall vs the Singapore dollar is non-stop. There has been many reasons given by BNM for the weak RM. One is the US debt ceiling impasse. Another is the banking turmoil in the US, EU.

But some experts believe its downfall has more to do with the stronger fundamentals in the Singapore economy. As said above, this has led to the ringgit weakening against the Singapore dollar.

The Singapore dollar has continued to appreciate against the ringgit hitting a new record high of S$1 to RM3.44 on Thursday, June 8, 2023. This means the The Singapore dollar has appreciated some 7.6 per cent from about 3.19 a year ago.

Three Years of PN MESS

It was pointed out that the report released by credit rating agency Fitch — prior to the May 29 analysis — stated that Singapore was rated AAA while Malaysia was rated BBB+. This is the result of three years of PN MESS. Their incompetence has led to the current constant ringgit downfall too.

While BNM is ignoring Singapore, it is also not taking China’s slow recovery into consideration. China’s ongoing economic recovery has been patchy, says experts.

China is one of Malaysia’s largest trading partners. Our economy is interlinked with the rest of the global supply chains. Ignoring all the factors, like that of China’s economic recovery not as strong as hoped, Malaysia would feel the effects.

Ringgit Downfall Explained

Then there is the issue of Malaysian exports. This is very important for the economic growth. But despite low RM, it contracted 1.8 per cent year on year in the first quarter of 2023.

This could largely be attributed to the decline in exports to China. So BNM is not telling us the full story, right? Looks like they lack the economic expertise to understand the current ringgit downfall!. Thus expect new lows vs the Singapore dollar.

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