KUALA LUMPUR (Feb 5): The ringgit is trading below the 3.0 mark against the Singapore dollar today for the first time since February last year.
This came after the Monetary Authority of Singapore (MAS) said there is sufficient room within its monetary policy band to accommodate an easing of the Singapore dollar exchange rate in line with any weakness in the economy arising from the 2019 novel coronavirus outbreak.
The ringgit appreciated to an intraday high of 2.9788 against the Singapore dollar — the strongest since Aug 14, 2018 when it traded at 2.9809 — before pulling back to 2.9901, according to Bloomberg.
Year to date, the ringgit has appreciated about 1.7% against the Singapore dollar.
The Singapore dollar also headed south against the US dollar today, touching a four-month low of 1.37 to the greenback.
MAS, in a statement today, said its monetary policy stance remains unchanged.
"However, there is sufficient room within the policy band to accommodate an easing of the Singapore dollar nominal effective exchange rate (S$NEER) in line with the weakening of economic conditions as a result of the outbreak of the 2019 novel coronavirus in China and other countries, including Singapore," it said.
Singapore uses the Singapore dollar nominal effective exchange rate (S$NEER) scheme to manage the Singapore dollar's rate against a basket of world currencies.
MAS said the S$NEER "has been fluctuating near the upper bound of the policy band" since it eased monetary policy last October.
"There is, therefore, sufficient room in the band for the S$NEER to ease in line with any weakness in the Singapore economy in the coming months," the central bank added.
MAS said it is monitoring economic developments closely and the next policy review will be held in April 2020.