Ringgit falls 0.2% to 10-month low against Singapore dollar

If you're looking to stretch your dollar a little bit further, now might be the time to cross the Causeway.

Ringgit fell 0.2 per cent on Wednesday (Sept 9) to 3.2162, marking a 10-month low against the Singapore dollar, Bloomberg reported.

Bloomberg quoted Wee Khoon Chong, a senior market strategist for Asia-Pacific at BNY in Hong Kong, as saying that the Singapore dollar will likely remain strong against the ringgit, adding that investors may see the Singapore dollar as a safer place to park their money.

The moves reflect the "relative advantage of the Singapore dollar over an equally supportive ringgit", Wee stated.

Following Malaysian Prime Minister Anwar Ibrahim's restoration of subsidised fuel quotas amid rising prices for energy, investors have also been proceeding with caution, Bloomberg reported.

Head of FX research and strategy at Maybank Saktiandi Supaat told The Business Times that the Singapore dollar's strength is largely anchored by the Monetary Authority of Singapore's exchange-rate framework.

Strength in major currencies such as the yen, combined with positive sentiment towards Singapore equities, has provided additional support, he added.

The ringgit had strengthened following the ASEAN Summit in October last year that was hosted by Malaysia, senior currency economist at DBS Philip Wee also shared with The Business Times.

However, he warned that the ringgit could weaken further against the Singapore dollar if the Federal Reserve System raises rates as markets expect, should the Middle East conflict result in crude oil prices going back above US$100 a barrel.

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