According to a report by The Edge Markets, the SGD to MYR exchange rate reached 1:3.1665 and was trading at RM3.1651 at the time of their report.
According to data from Bloomberg, the previous high was on March 31, 2017, when the dollar fetched RM3.1650.
Bank Islam Malaysia Bhd chief economist Afzanizam Abdul Rashid said Singapore had a head-start in terms of normalising its stance on monetary policy, due to the adjustments made by MAS.
“MAS has already started tightening its monetary policy by targeting the SGD NEER (nominal effective exchange rate) for appreciation in its recent monetary policy meeting on April 14.
“In Malaysia, inflation has remained stable for now as the consumer price index rose at a rate of 2.2% for the second consecutive month in March.
“In this sense, Bank Negara Malaysia (BNM) would have the room to keep the overnight policy rate stable in the near term,” Afzanizam said.
He added that the ringgit’s greatest uncertainty was now how the Federal Reserve would unwind its monetary easing.
“They (the Fed) used to say that inflation was temporary and therefore could weaken. But that’s not the case, and if you look at the many Fed officials, it seems that they are lagging behind in tightening monetary policy.
“We know that higher commodity prices will benefit the government and give it more policy space. That’s important because the economic recovery is still in the early stages.
“In that sense, the Malaysian economy should be able to recover decently this year.
“Our USD-MYR forecast remains at 4.15, but we may revise it depending on the outcome of the US Federal Open Market Committee (meeting) next week,” he said.
Oanda’s senior analyst Jeffrey Halley said it appeared as though the ringgit had become an indicator of weaknesses in China’s growth, as it was Malaysia’s largest trading partner.
“In this environment, the weakness of the MYR will continue unless China cranks up stimulus measures, or the CNY (Chinese yuan) stops weakening.
“BNM showed no signs of tightening monetary policy, also putting upward pressure on the cross.
“Despite the weakness of the MYR in the face of the rise in oil and palm oil prices, it appears that growth fears in China currently carry more weight,” Halley said.