Many flock to money changers as Singapore dollar hits new high against ringgit

BUSINESS has boomed for money changers in the last two days as the Singapore dollar rose to its highest level in recent memory against the Malaysian ringgit.

One Singapore dollar could buy RM2.7234 yesterday - the weakest the Malaysian currency has been against the Singdollar since at least 1981.

A long queue of people, mainly wishing to buy ringgit, formed at Crante Money Changer in People's Park Complex yesterday, where the rate was S$1 to RM2.696.

Next door, Mr Muhamed Nasu, 41, co-owner of money changer Haji Rahmathullah Store, said he would bring in "a few hundred thousand" more ringgit today to cope with the demand. The rate at his shop was S$1 to RM2.695 yesterday, slightly lower than the RM2.70 on Tuesday.

At the neighbouring Emerald Money Changer, where the rate was also S$1 to RM2.695, an employee said it had run out of ringgit by the afternoon.

The Singdollar gained after the Monetary Authority of Singapore announced on Tuesday that it would maintain its stance of a modest and gradual appreciation of the currency.

Meanwhile, Malaysia has had a spot of financial trouble lately. National revenue for the major oil exporter has been hit hard by the slump in oil prices, forcing the government to raise its deficit target for its 2015 Budget.

Global oil prices are still likely to average significantly below the US$93 a barrel recorded last year. Malaysia's foreign reserves tumbled to US$105 billion (S$143 billion) at the end of last month, a US$25 billion drawdown from a year earlier, and which Bloomberg reported as the steepest slide among Asia's large economies during that period.

Macquarie analyst Somesh Kumar Agarwal has said the weakening of the ringgit would affect tourist arrivals to Singapore and, in turn, potential revenues from the mass-market segment of Singapore's casinos.

Malaysians are among Singapore's top mass-market foreign gamblers, so the weak currency will put a dent in the high- stakes gaming business.

But Singapore shoppers to Malaysia are not complaining despite Malaysia's new 6 per cent goods and services tax kicking in on April 1. With an exchange rate favouring the Singdollar, items like milk powder, cooking oil and diapers still cost about the same.

IT analyst Terence Lim, 27, changed $1,000 yesterday, more than what he needs for a four-day trip to Johor Baru next month.

"I'll change more and keep it for later in case it goes up again," he said.

Malaysian Goh Fu Chao, 27, a logistics coordinator who lives and works in Singapore, changed $1,000 to pay for his car and housing loans in Johor, but reckons he would not save that much.

He said: "It doesn't really affect one much, unless you're changing $10,000 or more."