Ringgit at a 10-Month Low Against Singdollar: What\u2019s Behind the\nDrop?<\/p>\n
Reporter<\/p>\n
September 11, 2026 | 09:39 am<\/p>\n
TEMPO.CO, Jakarta - The Malaysian ringgit fell to a 10-month low\nagainst the Singapore dollar on September 9, reaching 3.22 per Singapore\ndollar. Some Singaporeans welcome the decline, saying the favourable\nexchange rate could encourage more trips and spending across the\nCauseway.<\/p>\n
According to The Straits Times, several factors have driven the\nweakened ringgit, including foreign fund outflows from Malaysian assets,\nbroader risk-off sentiment and uncertainty surrounding Malaysia\u2019s fuel\nsubsidy plans. Analysts said the decline does not necessarily reflect a\ndeterioration in Malaysia\u2019s economic fundamentals.<\/p>\n
The currency had gained 3.77 percent against the Singapore dollar in\n2025, but has weakened 1.86 percent so far in 2026. The recent decline\ncomes as higher global yields and uncertainty weigh on regional\ncurrencies.<\/p>\n
OCBC foreign exchange strategist Christopher Wong described the\nweakened ringgit as more of a near-term market adjustment. He said\nhigher oil prices, firmer U.S. Treasury yields and risk-off sentiment\nhave weighed on regional currencies, while a sell-off in Malaysian\ngovernment securities has also affected sentiment.<\/p>\n
Higher U.S. Treasury yields can make U.S. assets more attractive\ncompared with emerging-market assets, putting additional pressure on\ncurrencies such as the ringgit. Despite this, Wong said Malaysia\u2019s\ndomestic fundamentals remain relatively supportive, with growth,\ninvestment and the external sector continuing to hold up.<\/p>\n
Another concern for investors is how Malaysia will finance its fuel\nsubsidies. Market analyst Zavier Wong said uncertainty over the subsidy\nbill has contributed to foreign outflows from Malaysian assets,\nparticularly as oil prices remain elevated.<\/p>\n
Investors are now looking towards Malaysia\u2019s Budget announcement on\nOctober 9 for greater clarity. The government is expected to explain how\nthe subsidies will be funded, which could give markets a clearer idea of\nthe country\u2019s financial situation.<\/p>\n
One possibility is additional bond issuance, although investors will\nbe watching how this affects Malaysia\u2019s debt burden. The country has a\nstatutory debt ceiling of 65 per cent of gross domestic product.<\/p>\n
At the same time, the Singapore dollar has benefited from its own\nsources of strength. The Monetary Authority of Singapore (MAS) tightened\nmonetary policy twice in 2026, while Singapore\u2019s strong domestic growth\nhas allowed MAS to maintain a policy that permits the Singapore dollar\nto appreciate against trading partners\u2019 currencies.<\/p>\n
The Singapore dollar has also benefited from safe-haven flows,\nSingapore\u2019s political stability and strong fiscal position. While\nanalysts expect the currency to remain strong over the longer term,\nglobal uncertainty and high oil prices could create volatility. For now,\nthe ringgit could remain under pressure until Malaysia\u2019s October 9\nBudget provides more clarity on fuel subsidy funding.<\/p>\n
Read: How El Nino Rings Food Inflation Alarms Across ASEAN<\/p>\n
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