Home pages - full list (A-Z)

SGD/MYR at 17-Month High; Ringgit Slumps on FTSE Index Deselection

What is arguably Southeast Asia’s most important exchange rate, Singapore dollar-Malaysian ringgit, leapt on Thursday to its highest level since November 2017, driven by FTSE Russell’s decision to reconsider Malaysia’s inclusion in an important bond index.

Email share     Facebook     LinkedIn    Twitter

So far it’s been something of a tragic April for the Malaysian ringgit, which has lost value across the board, forcing SGD/MYR to its current rate of RM3.073. Owing to the fact that Singapore and Malaysia are each other’s second largest trading partner, SGD/MYR affects masses of regional trade.

The ringgit has been under significant pressure since March’s announcement by the Statistics Department of a second consecutive month of Malaysian deflation, and the latest strike against the currency comes this week in the form of Malaysia’s potential elimination from a globally important bond index over concerns relating to market accessibility.

SGD to MYR - 1 Week chart to 18 Apr
SGD/MYR - 1 Week chart to 18 Apr

FTSE Russell, provider of the FTSE World Government Bond Index (WGBI), has said it is considering downgrading Malaysia from a level 2 rating—the minimum required level for inclusion in WGBI—to a level 1.

Capital outflows following an elimination from the index—which one analyst said on Thursday is now “more likely than not”—could amount to US$8 billion (RM33.15 billion), Morgan Stanley has estimated.

Against the US dollar, the ringgit fell on Thursday to a 15-week low of RM4.145, and a day earlier it slipped to an 11-week low against the Australian dollar, which now buys RM2.981.

By contrast, the Singapore dollar has entered a period of unusual calm: at S$1.356 and S$0.97 respectively, USD/SGD and AUD/SGD have been trendless since mid-January.

The current economic situation makes it more likely that Malaysia’s central bank, Bank Negara, will cut interest rates in May, which could weaken the ringgit further. Though the Monetary Authority of Singapore expressed caution at its meeting last week, an unchanged policy remains most likely when it next meets in October.


Further Reading


Westpac Cuts Australian Dollar Forecasts, Expects Interest Rates to Halve This Year

The struggling Australian dollar will lose a further 5 percent of its value against the US dollar and pound before the year is out, and 3 percent against the euro and New Zealand dollar, Westpac predicted on Friday.

Last update: 25 May, 2019

Expensive Holidays for Brits After Pound Slips for Record 13th Day; What Next?

The British pound fell on Wednesday for a record thirteenth consecutive day against the euro. The currency is taking a Brexit-induced beating days before May’s half-term school break — a popular time in the UK for family holidays.

Last update: 25 May, 2019

Aussie Dollar Might Reach 10-Year Low of 65¢ After Decline Accelerates

The Australian dollar is now worth only 68.6¢ after another week of heavy losses, and now one senior analyst has predicted exchange rates in the “mid-60s” this year – rates not seen since 2009.

Posted: 18 May, 2019


Posted to: News

Please note that the opinions of our authors are their own and do not reflect the opinion of Best Exchange Rates and should not be taken as a reference to buy or sell any financial product.

Get a Better FX Deal when you Send and Spend Abroad.


Do NOT follow this link or you will be banned from the site!