Customers flocked to the money changers to snap up ringgit yesterday after the Malaysian currency crossed the psychological threshold of three to the Singapore dollar.
A snaking queue had formed at Crante Money Changer in People's Park Complex when The Straits Times visited during lunch hour.
Most customers were exchanging amounts of around $200 to $300 as they expected the ringgit to fall further.
The ringgit went off sale in some places as money changers opted out of the market, fearing they would get their fingers burned in the light of the ringgit's violent price swings in recent months.
"It's very volatile. Today we don't want to buy, don't want to sell because people are expecting three ringgit (to one Singdollar). We didn't bring in much stock because if we did and couldn't sell it, we'd make a big loss. We'll bring some in tomorrow," said Mr Mohamed Rafeeq, owner of Clifford Gems & Money Exchange at Raffles City.
The ringgit crossed the three-to-one line at around 9am yesterday, taking its cue from the crash in stock markets across Asia that followed China's surprise yuan devaluation two weeks ago.
The ringgit fell about 1.4 per cent yesterday to settle at 3.0166 to one Singdollar - and leaving it down 19 per cent from a year ago.
"My relatives in Malaysia are suffering... Their children are studying in the polytechnics here and they have to give them pocket money, but when they change it into Singdollars, they don't get a lot," retiree May Koo, 59, told The Straits Times at People's Park Complex.
The cheaper ringgit has also prompted a 32-year-old civil servant who owns a land plot in Iskandar to revise his retirement plan. "The low ringgit makes it more feasible for me to build a retirement house, because if I sell (the land) now, I'm not going to get back the money," said the man, who wanted to be known only as Mr Yeo.
And while Singaporeans may enjoy a psychological lift when they cross the border to shop this weekend, the tourism story looks less cheerful the other way around.
"Malaysia and Indonesia, whose currencies have weakened against the Singdollar, account for more than a third of tourist arrivals into Singapore. Our hospitality sector will be hurt if their currencies bring them less bang for their buck," said CIMB economist Song Seng Wun.
But analysts believe the ringgit will not stay at this level for long.
"Markets have been in overshooting mode because of the convergence of negative news - falling oil prices, political turmoil, China," said UBS Wealth Management foreign exchange strategist Tan Teck Leng. "In the long term, the ringgit is really undervalued and such a level should not persist on a 12-month basis."
