The ringgit slipped to its weakest level against the Singapore dollar in about 10 months on Sept 9, with S$1 climbing above RM3.21 as foreign fund outflows continued to pressure the Malaysian currency.
Bloomberg reported that the Singapore dollar strengthened by about 0.5% to around RM3.2115, pushing the ringgit to its lowest level against the currency since November.
The weakness comes amid sustained foreign selling of Malaysian equities, which has weighed on demand for the ringgit. Foreign ownership of local stocks fell to a record low in August, while net foreign equity outflows have exceeded RM5 billion so far this year.
At the same time, the Singapore dollar has remained supported by the Monetary Authority of Singapore’s relatively tighter policy stance, adding to the divergence between the two currencies.
Bank Negara Malaysia kept its Overnight Policy Rate unchanged at 2.75% on Sept 3, maintaining that the current monetary policy stance remained supportive of sustainable economic growth and price stability.
The ringgit’s latest decline against the Singapore dollar will be closely watched by businesses, travellers and Malaysians with Singapore-dollar commitments as markets assess further capital flows and monetary policy signals from both countries.
