Singdollar hits 10-month high against MYR; analysts still bullish on ringgit

[SINGAPORE] The Singapore dollar rose to a 10-month high against the Malaysian ringgit on Wednesday (Sep 9) as macroeconomic forces weigh on the ringgit and the Singdollar emerges as a safe haven amid global volatility.

The exchange rate between the two currencies rose as high as 3.2204 ringgit, according to Bloomberg data, having last been higher in November 2025.

Saktiandi Supaat, head of FX research and strategy at Maybank, stated that the move above the 3.2 mark for the currency pair reflects the Singdollar’s “resilience amid global uncertainty”. His comments followed the Bank of Singapore’s view that the currency is increasingly being used as a safe haven in investors’ portfolios.

On the other hand, the ringgit’s weakness “looks more like a near-term market adjustment than a change in Malaysia’s fundamentals”, said Christopher Wong, executive director and FX strategist at OCBC.

“Higher oil prices, firmer US Treasury yields and broader risk-off sentiment have weighed on regional FX, including MYR, while the recent sell-off in Malaysian Government Securities has also dampened sentiment towards the ringgit,” he said.

Global funds have also sold US$122 million in Malaysian stocks in September after a US$486 million outflow last month, according to Bloomberg.

The trend continued from the second quarter of the year, with Citi in July noting net foreign outflows of 3.3 billion ringgit (US$811 million) as foreign stock ownership declined to 18.3 per cent — compared to 18.9 per cent at the end of Q1.

The Singdollar is also supported by the Monetary Authority of Singapore’s exchange rate framework, which provides a policy anchor for the currency, said Maybank’s Supaat.

“Its currency-basket framework means strength in major currencies such as the yen can provide additional support,” he added, also speculating that positive sentiment towards Singapore equities may also be contributing to its strength.

Ringgit weakness to be short-term

The ringgit still stands to gain from Malaysia’s artificial intelligence-driven growth. The boom led to the Bank Negara Malaysia (BNM) on Sep 3 extending its interest rate pause for a seventh straight decision, keeping its overnight policy rate (OPR) at 2.75 per cent.

The central bank also “subtly removed its earlier characterisation that the current OPR level is appropriate”, said DBS analysts the next day, stating that the move was targeted at “creating policy flexibility amid resilient growth and ongoing vigilance over inflationary pressures”.

OCBC’s Wong theorised that profit-taking after the ringgit’s earlier gains may be adding to the move and said that “domestic fundamentals remain relatively supportive, with growth, investment and the external sector still holding up”.

“Near-term pressure could persist if global yields stay elevated and bond-market sentiment remains soft, but we do not see this as the start of a sustained MYR depreciation trend,” said Wong.

Maybank’s Supaat agreed, stating that although short-term portfolio flows can create volatility, the bank remains bullish on the ringgit given Malaysia’s “resilient growth, investment pipeline and electronics exports, alongside BNM’s steady policy stance”.

“We continue to favour selling the USD on rallies and would view rebounds in USD/MYR as opportunities to sell USD and buy MYR,” he added.