$1 to RM3.50: Money changer sells out ringgit in under 2 hours

The Singapore dollar reached an all-time high of 3.5086 against the Malaysian ringgit early Tuesday (Oct 24) morning, prompting a flurry of activity at the money changers today. 

The exchange rate first breached the 3.5 mark at 10.21pm on Monday. And as at 6pm today, it was trading at 3.5023.

At The Arcade in Raffles Place on Tuesday afternoon, AsiaOne saw that a number of money changers had indicated on their money exchange board that they have run out of Malaysian ringgit.

That was at about 4pm. 

However, there were lines at other money changers which still had the ringgit. 

A spokesperson from City Money Changers told AsiaOne that it sold out their Malaysian ringgit by noon, some two hours after it opened its outlet at 10am. 

This staff member said that she noticed a surge in buyers for Malaysian ringgit since the dip last week and believes that "it would continue to be that way for now".

A staff from Shara Exchange said that despite the long queues, the depreciation of the Malaysian ringgit was "a loss" to them. 

Some money changers who bought their ringgit at a higher price earlier would be selling the ringgit at a lower price now due to the currency's depreciation.

"There will be buyers who will be awaiting for the Malaysian ringgit to be sold at an even lower rate in the coming days," this staff member told AsiaOne.

This depreciation of the ringgit against the Singapore dollar could be attributed to differences in economic growth, inflation and interest rate differentials, UCSI University Malaysia assistant professor of finance Dr Liew Chee Yoong said to the New Straits Times. 

"Over the long term, the continuous depreciation of the ringgit against the Singapore dollar could also influence Singaporean corporate decisions on location for business operations, with Singaporean firms potentially investing more in Malaysia as the cost of doing business becomes cheaper," he added.

ALSO READ: Ringgit hits fresh low of 3.41 against Singapore dollar

ashwini.balan@asiaone.com