Stronger ringgit causes drop in customers at money changers

This article is more than 12 months old

Last month, one Singapore dollar was equivalent to RM3.17. On Thursday morning, the ringgit was trading at 3.07 a Singdollar, according to currency conversion app XE Currency.

Because of that, money changers told The New Paper that they have seen a drop in business of between 20 per cent and 50 per cent in the past weeks. Yesterday afternoon, the rate was at RM3.09.

The Money Changers Association president, Mr Omar, said the stronger ringgit has caused a 20 per cent decrease in the number of customers buying it in the past month.

He said: "When the rate is around 3.15, they will start to buy again."

The money changers TNP spoke to saw a similar trend.

A spokesman for Golden City Foreign Exchange in Toa Payoh said on Thursday that he usually sees a 50 per cent decrease in customers buying the ringgit once the rate falls below 3.10.

Three other money changers also saw a decrease since the rate dropped to 3.10 two weeks ago - 30 per cent for Mustafa's Foreign Exchange, 20 per cent for True Blue Money Changer at Lucky Plaza and 25 per cent for AR Money Exchange at Bishan.

Mr Vishnu Varathan, a senior economist at Mizuho Bank, said the stronger ringgit is most likely due to the Malaysian central bank, Bank Negara Malaysia, relaxing its controls on foreign exchange.


He said: "Investors are now confident to plough back money into Malaysian bonds, as confidence to re-enter the Malaysian market was partially restored by its enhanced ability to manage foreign exchange risks."

He added that stabilising oil prices could also be a factor for the strengthening ringgit.

"But the ringgit will continue to fluctuate as there is a lack of clear direction," he said.

CIMB economist Song Seng Wun added that external and domestic factors can affect the ringgit.

He said: "External factors will be the strength or weakness of the US dollar and commodity prices.

"In this situation, the US dollar was weaker the past two weeks (so the ringgit strengthened against the US dollar)."