Malaysian PM says central bank's measures will stabilise ringgit

PHOTO: The Straits Times

Malaysian Prime Minister Najib Razak said on Monday that new measures taken by the central bank will help stabilise the ringgit currency, state news agency Bernama reported.

Bank Negara implemented measures in November to curb offshore trade of the ringgit and stem the fall of a currency that was one of Asia's worst performers in 2016.

Najib said at a monthly gathering of the staff at the Prime Minister's department he expects the global economy to recover in 2017 after a challenging 2016.

Read also: Ringgit breaches psychological mark of 4.50 against the US dollar

The impact of the falling ringgit on Singapore

  • The Malaysian Ringgit (MYR) has slumped to an all time low at RM3.12 to the Singapore dollar (SGD).
  • This sounds like an excellent chance to head to Johor Bahru (JB) and make all the purchases while it lasts. The already cheap food and groceries just got cheaper and fuel is about a third of Singapore's price.
  • But while we might be rejoicing now that the MYR has spiraled downwards, but in the mid to longer term, the ones that would be suffering the most may be Singaporeans.
  • Many often forget that Malaysia is the third largest economy in South East Asia, and within the top three largest export destinations for Singapore's goods and services.
  • If Singapore's currency becomes too strong, there will be a reduction in Malaysian demand for Singapore's exports which will ultimately reduce Singapore's earning power.
  • The short term benefits may be apparent but in the long term, any weaknesses in the economies of our major trading partners will not be good news for Singapore.
  • But there are ways to take advantage of the weaker ringgit. As individuals, we can head to the moneychangers and buy up some MYR.
  • Singaporeans should definitely consider visiting JB for their delicious food and other goods.
  • JB has other attractions too, like Legoland, where a combo adult ticket, which allows you entry to the theme park and the water park, costs RM175 while the child and senior option costs RM140.
  • An entry ticket to the Hello Kitty Town costs RM75 for both adults and children.
  • Singaporeans can also consider investing in Malaysia. If we were to invest in the KLCI Index at Dec 31, 2006, we would have made a handsome return on about 48.6 per cent.