Ringgit hits strongest level versus Singapore dollar since 2021

The Malaysian ringgit hits its strongest level against the Singapore dollar since 2021, boosted by energy prices and AI optimism. Read more at straitstimes.com.

SINGAPORE – Malaysia’s ringgit rose to the strongest versus the Singapore dollar in five years as higher energy prices support the net energy exporter, which was also propelled by optimism over artificial intelligence.

The ringgit strengthened 0.2 per cent to 3.0615 versus its Singaporean counterpart on March 18, its highest level since March 2021.  

The “ringgit should be one of the best performing currencies in Asia (again) this year,” Goldman Sachs Group strategists including Danny Suwanapruti wrote in a note on March 14. “Given the disruption in the Strait of Hormuz, and likely higher liquid natural gas prices, we think Malaysia is best positioned in the region to weather a global energy shock.” 

“We remain bullish on the ringgit and maintain our short Singapore dollar-ringgit trade recommendation.”

As a net energy exporter, Malaysia’s currency has been supported by signs of Brent oil prices potentially staying higher for longer, as investors continue to monitor the Iran war and the impact on the movement of oil around the world. In comparison, most regional Asian economies, including Singapore, are net oil importers, and have seen their currencies drop as energy costs rise.  

Malaysia’s currency has also been boosted by foreign direct investment related to AI, as well as above-forecast gross-domestic-product growth. The Singaporean dollar-ringgit pair has significance because the countries share close trade ties, and the land border between them is one of the busiest crossings in the world. BLOOMBERG