It was reported on Wed (17 Apr) that the Singapore dollar had risen to a 17-month high against the Malaysian ringgit, as demand for the ringgit weakened amid concerns the country’s debt may be removed from a key global bond index.
The Singapore dollar (SGD) rose to an intraday high of MYR3.0632 on Wed, the highest since the SGD touched MYR3.0724 on Nov 20, 2017. Year-to-date, the SGD has risen 0.74 per cent against the ringgit, according to Bloomberg.
FTSE Russell, a global index provider, said on Mon (15 Apr) that it could drop Malaysia from the FTSE World Government Bond Index (WGBI) because of concerns about market accessibility and liquidity. Morgan Stanley estimated that Malaysia could see outflows of almost US$8 billion if its bonds are downgraded when FTSE Russell carries out its review in September this year.
“The government needs to address this concern of bond managers and boost their confidence,” Phillip Capital Management SVP Dr Nazri Khan Adam Khan told the media.
FTSE Russell has already placed Malaysia together with China under its full watch list of fixed income markets that will be reviewed for potential changes this Sep.
Good news for Malaysians working or wanting to work in Singapore
With the continual rise of the Singapore dollar against the Malaysian ringgit, it would certainly spell good news to the Malaysians working or wanting to work in Singapore, as they could earn up to three times or more than their counterparts working in Malaysia.
“It’s not just a perception, it’s reality. Even accounting for the Singaporean expenses that I wouldn’t incur in Malaysia such as rent and no home-cooked food, the savings in Singapore are far greater than Malaysia,” Malaysian IT worker Choon Seng said.
Lu Yi, another Malaysian who quickly took up a regional role in Singapore when an opportunity presented to her in 2015, noted that many Malaysians who work in Singapore would usually have a higher spending power.
“Most of the friends I know are trying to save as much as they could, so they can buy a property back in Malaysia. Also, I have known friends who do not travel budget ever since they earn in SGD,” she said.
Nasuha Gunawan, who works as a serving staff at a coffee outlet in Singapore, said, “My take home pay is S$1,600 and with overtime it can go up to S$1,900. If I were to do similar work in JB, the pay is only RM1,300.”
Factory storekeeper M. Mohindran added he could earn up to S$2,500 monthly with overtime. Both Gunawan and Mohindran ride motorcycles to work to beat the congestion as they live in Johor.
Even the President of Johor South SME Association Teh Kee Sin commented, “I’ve a Malaysian friend working as an accountant there (Singapore) earning S$8,000 a month (RM22,400). He was only drawing a salary of RM6,000 here (in Malaysia).”
Last year, a Johor politician complained that too many Malaysians are flooding into Singapore to work (‘Rep: Too many Malaysians working in Singapore‘, Aug 2018).
He claimed that the high number of Malaysians working in Singapore will create problems for Johor if left unchecked by the authorities. He remarked that the weakened ringgit since 2016 was one of the major factors that had driven Malaysians to find employment in Singapore.
“The number of Malaysians shuttling between Johor and Singapore for work every day had once been recorded to reach 400,000,” he added.