Demand for ringgit down as currency strengthens

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(Jan 17): The rise in the ringgit against the Singapore dollar has sent demand for the Malaysian currency plunging at some money changers in Singapore.

Mr Mohamed Rafeeq, owner of Clifford Gems and Money Exchange at Raffles City mall, told The Straits Times that sales of the ringgit are down about 30 per cent from three months ago. "The ringgit is getting stronger, so people don't want to buy it... I am hoping that it will get better," he said.

Malaysia's stronger trade performance and higher oil prices have helped lift the currency after a prolonged period of decline.

Mr Barakath Ali, first vice-president of the Money Changers Association (Singapore), said: "We expect that the ringgit will either appreciate further or maintain its present level until the Malaysian election." The general election must be held by August.

The ringgit was trading at RM2.99 to the Singdollar yesterday after 14 months of being comfortably above RM3.

Trader Danny Lee, who visits Johor Baru at least once a month to eat, shop and get massages, said the strengthening ringgit would cause him to cut back on the number of trips. "If the ringgit continues to rise, then it will not be worth the amount of time and money needed to travel to Johor Baru," said Mr Lee, 53.

However, not everyone is feeling the pinch. Malaysian Evelina Tan, an IT analyst who works in Singapore, said the strengthening ringgit has little effect on her.

"It doesn't impact me in any way because, after all, the conversion rate is still high," said the 26-year-old. "Even if it drops to RM2.50 per $1, it is still a good rate. I am saving a lot and living comfortably."

And although the ringgit has become pricier for those holding the Singapore currency, some people still see the need to make the currency exchange.

An employee of Arcade Plaza Traders money changer, who did not want to give his name, told The Straits Times that business for the ringgit has not dropped, noting: "Chinese New Year is coming, and a lot of Malaysians are working here in Singapore. So, maybe, they need to change their savings into ringgit for Chinese New Year shopping. A lot of Singaporeans may also go to Malaysia for Chinese New Year shopping."

In Malaysia, the stronger ringgit is reason to cheer amid widespread complaints over cost-of-living issues as the country imports many goods, from Chinese vegetables to European fast fashion brands to Australian apples. A higher ringgit makes these imports relatively cheaper.

Said manager Sherene Meetha Pillai, 31: "Since the ringgit is doing better now, I am looking forward to getting good deals at the grocer."