High returns: People with Singapore currency enjoying favourable exchange rates at money changers around Johor. — THOMAS YONG/The Star
JOHOR BARU: For the past two weeks, people who have Singapore dollars have been delighted following a favourable exchange rate due to the weakening of the Malaysian ringgit.
Money changers around the two border crossings with Singapore have seen their business increase by up to 30% after the ringgit came to RM3.23 for S$1 earlier this month.
A money changer who only wanted to be known as Mohamed said, that besides Malaysian workers in Singapore, even Singaporeans were coming to Johor to change their spare cash due to the favourable exchange rate.
He added that the money changers have begun seeing more business after the border with Singapore reopened in April.
“During Singapore’s national day on Aug 9, we exchanged more than RM1mil within 24 hours,” he said, adding that he has a few outlets in the city.
Mohamed said that as sales went up this month, a “price war” loomed among some of the money changers in the city to woo customers.
“Usually, for each S$100 that we change, we make about RM1 in commission. Due to the price war, some were trying to earn a higher commission,” he said, adding that all Singaporean dollars they exchanged could only be transacted with local banks.
Asked about claims that some money changers in Singapore had run out of the ringgit since early this month, Mohamed said that many of them didn’t want to hold too much ringgit as they didn’t want to incur losses.
Another money changer known only as Tan said that most money changers in Singapore have a limited supply of the ringgit as it was not a legal tender which could be traded outside Malaysia.
“Very few people have licences to take out the ringgit overseas,” he said, adding that some unregistered agents might also try smuggling ringgit out to neighbouring countries.
He added that the price war among money changers was not just a problem in Malaysia, but they were also forced to compete with Singaporean money changers who were offering better rates than those in Johor.
Meanwhile, Malaysian Association of Money Services Business (MAMSB) southern region council member Analisa Yin said the public should not turn to illegal money changers hoping to get better rates.
She also said the Covid-19 pandemic had caused some members to cease operations.
“Previously, we had about 57 members in Johor and Melaka. But now we have 43 members with approximately 170 outlets in these states.”
She said that the association was working with certain embassies such as Indonesia, Nepal, Bangladesh and India to ensure their workers were aware of legal remittance channels instead of turning to illegal operators who usually offered their services via social media and Facebook.
It was earlier reported in the Singapore media that there were long queues at money changers at The Arcade in Raffles Place on Aug 4, but that had more to do with a shortage of supply of ringgit on sale.
However, some money changers still accept ringgit for Singapore dollars.
It was also explained that small-scale money changers were finding it hard to profit from selling the ringgit now as sales have to be millions of dollars before they see significant profits.
