The Malaysian Ringgit (MYR) has recently appreciated to its highest level against the Singapore dollar (SGD) in 90 days, currently trading near 0.3172. This marks a notable increase of 2.1% over its 3-month average of 0.3108, reflecting a stable trading pattern within a 4.0% range from 0.3050 to 0.3172.
Several factors contribute to the MYR's strength. Expectations of a US Federal Reserve rate cut have underscored the MYR's appreciation, complemented by Malaysia's positive economic indicators, including a robust trade balance and significant foreign direct investment inflows. Analysts have cited the government's fiscal consolidation efforts as pivotal in boosting investor confidence and supporting the MYR's value. Furthermore, recent trade agreements secured at the ASEAN Summit, particularly those with the United States, have further enhanced Malaysia's economic prospects, thereby strengthening the MYR.
Conversely, the Singapore Dollar's recent performance is influenced by adjustments in monetary policy by the Monetary Authority of Singapore (MAS). Since January 2025, the MAS has opted for a more gradual appreciation of the SGD to foster economic growth amid low core inflation. Despite maintaining monetary policy settings due to stronger-than-expected economic growth, the SGD faced pressure from potential trade tensions and tariffs impacting key exports, which could necessitate future policy easing.
Additionally, the international oil market impacts both currencies, particularly the MYR, which is sensitive to oil price fluctuations. Currently, oil is trading at $60.53 per barrel, approximately 5.2% below its 3-month average and within an 18.8% volatile range. These movements indicate significant fluctuations that could potentially affect the MYR's performance as Malaysia is a major exporter of oil.
Overall, analysts suggest that the outlook for the MYR remains positive due to solid domestic fundamentals, while the SGD might experience more volatility stemming from external economic pressures and monetary policy responses. Businesses and individuals engaging in currency transactions should stay vigilant of these evolving trends as they may present opportunities to save on exchange costs.
