KUALA LUMPUR, May 23 — The Singapore dollar hit an all-time high earlier today against the Malaysian ringgit, a report showed today. International news outlet Channel News Asia (CNA) reported that the Singapore dollar reached RM3.1964 this morning before dropping slightly to 3.1950 later in the day. "SGDMYR hit a record high of 3.1964 this morning (6.48am BST, 1.48pm Singapore time), largely due to strength in the Singapore dollar, as preferred by MAS officials.

"There wasn’t one individual headline catching event, but instead the technicalities of Singapore’s monetary policy that created this all-time high,” Simon Harvey, head of FX analysis at MonFX, told CNA using the acronym for the Monetary Authority of Singapore.

Harvey said that US President Joe Biden’s decision to mull cutting tariffs on Chinese goods has helped lift the Chinese Yuan to its highest point since May 5 — which has indirectly helped the Singapore dollar. "With the yuan holding the largest share in Singapore’s S$NEER basket, the rally in CNY dragged SGD higher too as currency traders looked to offset the depreciation in the Sing dollar relative to CNY with other currencies.

"This saw SGD strengthen against other major trade partners, including USD (+0.49 per cent), MYR (+0.13 per cent), HKD (+0.47 per cent) and JPY (+0.05 per cent), such that the S$NEER exchange rate continued to drive higher in line with (MAS’s) preference,” Harvey was quoted as saying by CNA. According to experts CNA reached out to, differing monetary policies by the Singapore and Malaysia central banks were the main reason why the Singapore dollar is doing so well against the ringgit. "The Singapore dollar has been stronger on the appreciation front because of the policy moves,” said Saktiandi Supaat, head of FX Research at Maybank in Singapore to CNA. Currency strategist Sim Moh Siong at the Bank of Singapore noted that Malaysia’s central bank has been keeping its interest rate stable, although it did surprise recently by raising its benchmark lending rate by 25 basis points.

"This policy divergence is benefiting the Singapore dollar,” Sim was quoted as saying, adding that the Singapore dollar is expected to remain strong in the near-term. He however added that there will be room for the ringgit to "play catch up” in the next six to 12 months. "By then, the rate hike by the Malaysia central bank will move into higher gear,” said Sim, adding that the ringgit should also benefit from higher commodity prices once the global risk stabilises.

Previously it was reported that the ringgit slid further to open lower at RM4.4 against the US dollar on May 18, the lowest since March 2020 following a hawkish stance by the US Federal Reserve to tighten its monetary policy. However, it appreciated against the Singapore dollar to 3.1693/1717 from the previous day’s close of 3.1713/1728.