JOHOR BARU: The ringgit’s recent climb to around 3.16 against the Singapore dollar was expected and has had little impact on cross-border trade between Malaysia and Singapore, says an economist.
Universiti Teknologi Malaysia senior lecturer Prof Dr Nanthakumar Loganathan said the climb was consistent with the ringgit’s broader gains against the US dollar since the third quarter of 2025.
The impact on bilateral trade has been limited, he said, as the Singapore dollar remains substantially stronger than the ringgit.
“The rise of the ringgit against the Singapore dollar will not have a major effect as foreign direct investment from Singapore – one of Malaysia’s largest trading partners – continues to show an upward trend,” he told Bernama.
He cited several large-scale investments in Johor, particularly within the Johor-Singapore Special Economic Zone (JS-SEZ), as clear signs of Singaporean investors’ confidence in Malaysia’s economic prospects.
Nanthakumar said the ringgit’s strength could be temporary, given the potential influence of global economic uncertainty on currency movements in the near term.
Asked whether the ringgit’s performance reflected Malaysia’s economic fundamentals, he said the positive trend was supported by stronger domestic conditions and prudent fiscal policies, especially in taxation and spending management to contain inflation and unemployment.
A firmer ringgit, he said, could bolster confidence among traders and foreign investors by signalling exchange rate stability and a more resilient economic trajectory.
However, he cautioned that exports could face mild pressure if the ringgit continues to strengthen as Malaysian goods would become more expensive in international markets compared with regional peers with weaker currencies.
Separately, Johor Bumiputera Entrepreneurs Council member Samsudin Ismail said the stronger ringgit must be underpinned by solid and sustainable economic fundamentals for its benefits to be felt by the public, particularly in addressing rising living costs.
He said the appreciation would be meaningful only if it proved consistent, rather than temporary and driven solely by external factors.
