PETALING JAYA: The ringgit’s weakness against the Singapore dollar in 2023 was due to inflation differentials between the 2 international locations, in accordance to Maybank Investment Bank Bhd (Maybank IB).
Foreign alternate analysis head Saktiandi Supaat stated inflation in SIngapore stayed elevated whereas it decelerated in Malaysia.
“Our view on the SGD-MYR, for my part, was formed by inflation differentials. Malaysia’s inflation has continued to be softer whereas in Singapore, core inflation continues to be elevated and sticky,” he stated throughout Maybank IB 2024 Market Outlook media just lately.
He stated this led to totally different financial coverage responses between the Monetary Authority of Singapore (MAS) and Bank Negara Malaysia (BNM) the place MAS adopted a tighter fee to make sure the energy of the Singapore Dollar so as to mitigate inflation.
He predicted that MAS’s dedication to a powerful Singapore dollar is probably going to proceed till presumably within the later a part of this yr so long as inflation in Singapore stays excessive.
“There could possibly be a change in MAS’s method within the later a part of the yr the place MAS would begin easing off a bit and that might assist to additional add on to the story of a SGD-ringgit falling off in the direction of a 3.30 or barely beneath 3.30 ranges as nicely,” he stated.
