The Malaysian ringgit tumbled to a 12-year low in offshore markets yesterday, sending some Singaporeans into a buying frenzy.
One Central District money changer told The New Paper that his stock of RM300,000 (S$96,000) was sold out in four hours.
Emerging stock markets and their currencies have been hit by fears that once Mr Donald Trump assumes the US presidency, higher interest rates would spark capital outflows from this region.
At 10am yesterday, the ringgit was trading at 3.1504 per Singdollar according to currency conversion app XE Currency. The rate shown on the app is usually higher than what is offered at the money changers.
By noon, it was at 3.0351 at AR Money Exchange at Junction 8. By 2pm, it was between 3.035 and 3.05 at eight money changers at The Arcade in Collyer Quay.
Money changers there told TNP they saw a surge of customers buying ringgit yesterday .
Aksha Exchange opened its shutters at 10am and ran out of its stock of RM300,000 by 2pm.
Its owner said: “We didn’t expect to run out. So many people came to buy.
“One week ago, S$1 was RM3. Today, it is RM3.04.”
Since Mr Trump won in the Nov 8 election, the money changer has noticed a 30 per cent increase in the number of customers buying ringgit.
This was echoed by Arcade Plaza Traders’ administration manager, Mr Deen: “Forty to 50 per cent of our customers today bought ringgit. ”
Mr Trump’s pro-growth message in his acceptance speech had sent US stock markets and the US dollar soaring. (See report below.)
The president-elect even had a cordial midday meeting yesterday with US President Barack Obama that had a positive impact in the US. (See report below.)
But it was bad news for emerging markets, including Singapore.
Even in the queues, there were winners and losers.
Shop manager Niel Hoh, 28, who makes a trip to Malaysia every two months, saved more than $200.
“I bought RM10,000 for S$3,278.69 today. Two weeks ago, I bought only RM1,500, S$1 was around RM2.90.”
But permanent resident David Wong, 55, who works in a Malaysia real estate firm, felt the pinch.
He sold RM20,000, and got about S$6,500 – about S$200 lower than what he would have got four weeks ago.
Money Changers Association Second vice-president Danny Yoong, 48, observed that ringgit-buying remained stable in the past few weeks.
Mr Yoong, who also owns Bon Voyage Money Changer, said: “But there are signs that the ringgit is weakening, and demand for ringgit may become high.
“There are also some customers who wait to see whether the ringgit rate will go down even further.”
He added that the Singdollar is not doing well against the US dollar, and sees a 10 per cent increase in people selling US dollar.
ELECTION
“Before the election, Singdollar was trading at 1.38 to 1.39 per US dollar, but it became around 1.400 to 1.415 after the election,” said Mr Yoong.
At 8.56am, the Singdollar was trading at 1.4135 per US dollar – down 0.57 per cent from its close of 1.4054 the previous day.
Bank Negara Malaysia governor Muhammad Ibrahim sought to assure Malaysians that the ringgit’s fall is due to speculation among investors and not the country’s fundamentals.
But senior economist at Mizuho Singapore, Mr Vishnu Varathan, said the plummeting ringgit will have a short-term impact on the cost of living of Malaysians and Singapore.
He said: “We have many cross-border transactions and involvements. The ringgit also features heavily in Singapore’s basket of currencies, so the Singdollar will also be affected.”
The Singapore stock market continued its fall following Mr Trump’s victory.
After Wednesday’s knee-jerk losses, The Straits Times Index continued its downtrend and ended 19.49 points, or 0.69 per cent, lower to 2,814.6, taking the year-to-date performance to -2.36 per cent.
Travellers to US unfazed by post-election events
Reports of rowdy street protests and an increase in hate crimes on minorities after Mr Donald Trump won the US Presidential election have not deterred Singaporeans from making travel plans to the US.
Travel agencies approached by The New Paper said they have not seen any cancellations so far.
Dynasty Travel spokesman Alicia Seah said: “Travellers are usually concerned if there are frequent terrorist attacks, ongoing intense crime or violence, civil war or health alerts of an epidemic outbreak.
“With the result of the recent US election, there may be short-term events of demonstrations which will not affect travel sentiments.”
Similarly, a Chan Brothers spokesman said it has not received calls from any concerned customers.
“Similar to last year, bookings and inquiries for travel to the US have been consistent throughout the year,” she said.
Ms Seah said the demand for US tours has stayed stagnant in the past five years, but there was a slight increase of about 5 per cent this year.
“This is in view of direct flights into San Francisco and higher demand in the leisure segment as well as student markets,” she added.
A woman who declined to be named said the election results and strong US dollar is putting a damper on her plans to travel to Boston, Washington DC and New York next week.
The sales executive, who is in her early 30s, said: “I will still be shopping, but will probably not spend on big-ticket items like branded bags.
“I’m just going there and hoping that the places I visit will not be affected by the protests.”
Students going overseas worry about weak dollar
The weakening Singapore dollar has left Singaporeans worried about the rising cost of studying abroad.
Ngee Ann Polytechnic’s final-year mass communication student Heidi Tan, 19, said she will have to be extra thrifty when she enrols in Monash University in Australia next year.
“I’m also going to get a part-time job so that I can study without constantly thinking about money,” she said.
As at 2pm yesterday, the Singapore dollar was trading at 0.9308 against the Australian dollar – down from 0.9623 exactly a month ago.
Mr Clement Seow, 19, a third-year polytechnic student who plans to study in Australia, said he was considering other options.
“If our dollar weakens considerably against the Australian dollar, I might reconsider attending a university there as it would mean skyrocketing expenses,” he said, adding that he might consider studying in other countries such as Japan.
But Ms Eve Yeo, 26, who is pursuing a master’s in health communication at Tufts University in Boston, US, said she is unaffected by the weakening Singapore dollar.
As at 7.30pm yesterday, the Singapore dollar was trading at 1.410 per US dollar.
“I changed all my money to US dollars before flying over earlier this year, so I don’t foresee being impacted by the falling rates now,” she said.
But it is not the end of the world for Miss Tan, who said: “I don’t think the increased value of the dollar will keep me from pursuing what I want to do because this is something I’ve been planning for a long time.”
Source: The New Paper
