The Singapore dollar to Malaysian ringgit exchange rate reached 1 SGD to 3.0615 MYR during the morning trading session on the 18th, marking the lowest level since March 2021.
According to a report by Lianhe Zaobao, market observers pointed out that the strengthening of the ringgit is mainly due to rising energy prices, which provide support for Malaysia as a net energy exporter.
As of midday on Wednesday, the Singapore dollar to ringgit exchange rate had slightly rebounded to 1 SGD to 3.0693 MYR.
Analysts at investment bank Goldman Sachs noted in a report that the ringgit is expected to once again be one of the best performing currencies in Asia this year.
The report stated: "Given the obstruction at the Strait of Hormuz and the possible rise in liquefied natural gas prices, we believe Malaysia is the most capable in the region to withstand global energy shocks."
As a net energy exporter, rising Brent crude prices provide support for Malaysia’s currency. The global benchmark Brent crude oil futures price has remained above 100 US dollars per barrel for several days.
In contrast, most Asian economies including Singapore are net oil importers, and as energy costs rise, their currencies are under downward pressure.