The Malaysian ringgit has reached its strongest level against the Singapore dollar in more than a year, but Singaporean visitors say the currency shift has not stopped them from travelling to Johor Bahru for shopping, dining and services.
“For me, it doesn’t matter because I don’t spend much here,” said Singaporean finance worker Edmund Lee, who crosses the Causeway every few weeks for groceries and meals. Like many others, he believes Malaysia continues to offer strong “value for money”, according to Channel News Asia.
This continued spending from Singapore – Malaysia’s most important tourism market – is providing crucial support as the country manages the economic effects of the stronger ringgit, which is benefitting some sectors while hurting others.
After hitting a 26-year low against the US dollar in February 2024, the ringgit has rebounded to a one-year high. Against the Singapore dollar, it strengthened from around RM3.50 in January 2024 to RM3.19 this week.
In Johor Bahru, where businesses heavily depend on Singaporean customers, the impact has been minimal. At a car wash located less than a kilometre from the Woodlands Causeway, manager Ramesh Ponnayah reported no change in the number of Singaporean patrons. Malaysian Association of Hotels Johor chapter chairman Ivan Teo confirmed the trend, saying that while Johor is preparing for a 25 per cent decline in visitors from more price-sensitive markets like Indonesia and Thailand, the steady influx from Singapore remains a “lifeline”.
Domestically, the rising ringgit is proving advantageous. Importers such as garment maker Chua Hunt are saving on material costs from China and using the gains to improve product quality. Consumers are also benefitting from stronger purchasing power, with motorcycle dealers noting more customers upgrading to larger models.
But exporters face mounting challenges. Economists warn that industries such as furniture and gloves are being hit by a “double-whammy” of a stronger currency making exports less competitive, combined with existing US tariffs.
Analysts say the ringgit’s rally is driven by expectations of interest rate cuts by the US Federal Reserve, making emerging market currencies more attractive, as well as successful fiscal reforms by the Malaysian government – including subsidy rationalisation – which have lifted investor confidence.
