Singapore shoppers scoop up Lunar New year bargains in Malaysia as city state’s dollar rides high: ‘it’s like a bonus’
- As the cost of living back home soars, Singaporeans are taking advantage of their local dollar’s unprecedented strength when they cross the border
- The Singapore dollar has risen to a record 3.55 ringgit, as Malaysia’s currency is buffeted by weaker exports and a wide interest rate gap with the US
“It’s really going crazy,” Lee said of the exchange rate. “It’s like a bonus – during Chinese New Year we buy soft drinks, beer and invite friends over, and this really helps. You can buy more.”
Lee is one of many residents of Singapore who are taking advantage of the local dollar’s unprecedented strength when they cross the border into Malaysia, as the cost of living soars back home.
The Singapore dollar has risen to a record 3.55 ringgit after five successive rounds of policy tightening until October 2022, and the central bank’s efforts to dampen inflation may pave the way for more currency strength.
The ringgit, on the other hand, has been buffeted by weaker exports and Malaysia’s wide interest rate gap with the US. Years of equity capital outflows and political tumult have further dented sentiment on emerging Asia’s worst-performing currency.
“It is a simple gauge of relative living standards,” said Khoon Goh, head of Asia research at Australia & New Zealand Banking Group Ltd. “Based on the historical trend in the Singapore dollar-ringgit exchange rate so far, the question is when we could reach 4.”
Against the US dollar, the Malaysian currency has fallen about 3.5 per cent this year, adding to losses from the previous three years.