November 18, 2025
SINGAPORE – The Malaysian ringgit has strengthened against the Singapore dollar in recent months, with one Singapore dollar now buying RM3.19, down from above RM3.30 for most of 2025.
While the shift gives Malaysians more spending power here, the weaker rate may prompt some Singaporeans to think twice before crossing the Causeway for cheaper groceries, goods or weekend getaways.
This could be the case for a while to come, with analysts expecting the exchange rate to stay near current levels through the rest of 2025 before weakening slightly in 2026.
Maybank Securities expects the ringgit to trade between RM3.20 and RM3.30 per Singdollar by the end of 2025, before strengthening further in 2026.
What’s driving the ringgit’s appreciation?
The ringgit has appreciated mainly because more money is expected to flow into Malaysia as US interest rates come down and as Malaysia’s economy picks up with new government reforms and stronger growth, explained Maybank head of foreign exchange (FX) research Saktiandi Supaat.
More capital is leaving the US after the Federal Reserve cut its policy rate twice in 2025, and this is finding its way into other markets like Malaysia, resulting in the strengthening of the ringgit versus the US dollar and other currencies.
Meanwhile, Malaysian Prime Minister Anwar Ibrahim’s administration introduced investment-friendly policies in 2025 that make it easier for foreign businesses to invest in sectors such as semiconductors, electric vehicles and digital technology, by cutting red tape and strengthening investor protections.
Malaysia’s net foreign direct investment inflow jumped to RM8.5 billion in the third quarter of 2025, up sharply from RM1.6 billion in the second quarter, according to official data. The rebound was reportedly led by the services sector, especially information and communications, with major investments coming from Singapore, among other countries.
Johor was among the states that received the highest amount of foreign capital, fuelled by initiatives such as the Johor-Singapore Special Economic Zone, which drew investments from data centre operators and advanced manufacturers, the Malaysian Investment Development Authority said.
In addition, data released last week showed the economy growing 5.2 per cent in the third quarter, up from 4.4 per cent in the second, as consumption and exports continued to strengthen.
A currency tends to strengthen when the domestic economy is strong because investors around the world see that country as more attractive, stable and profitable.
Datuk Seri Anwar in October also announced a record high RM470 billion spending plan under the 2026 Malaysia Budget, promising fiscal reforms and growth that should continue to make Malaysia an attractive place to invest in, Mr Saktiandi noted.
Bank of Singapore currency strategist Sim Moh Siong noted that while Malaysia’s gross domestic product growth was stronger than expected due to robust manufacturing demand and semiconductor-related exports, the ringgit’s appreciation against the US dollar and Singdollar was in line with the bank’s forecasts.
This is after Bank Negara Malaysia cut its policy rate for the first time in five years in July, but kept the rate steady in its latest meeting in September, citing global economic expansion.
What is the likelihood of a stronger ringgit in 2026?
For now, analysts expect the ringgit to stabilise above the RM3 per Singdollar level. Maybank’s forecast is for the Malaysia currency to trade at around RM3.15 to RM3.17 to the Singdollar.
Mr Saktiandi noted that the Monetary Authority of Singapore is expected to keep the Singapore dollar on a gently appreciating trajectory against major currencies, as the central bank balances lingering inflation concerns with the Republic’s resilient growth outlook.
Mr Sim said the ringgit’s recent gains have been sharp and fast, but it remains uncertain whether the strength can be sustained. “For the currency’s rise to hold, we need to see the supporting drivers show up elsewhere, such as in a stock market rally or stronger foreign inflows into Malaysian bonds. So far, that hasn’t happened.”
UOB senior FX strategist Peter Chia added that the main risk to the ringgit’s rally is a delay in the Fed’s rate cuts, which could strengthen the US dollar and trigger portfolio outflows from emerging markets, including Malaysia.
With the recent US government shutdown delaying key economic data, the Fed is now widely expected to hold rates in December and wait for clearer signals before easing.
Still, there are factors that could drive the ringgit higher.
For one thing, Mr Anwar’s ties with Mr Donald Trump appear cordial following the US President’s recent visit to Malaysia, and sentiment has improved on the view of Malaysia as a credible US trade partner, Mr Saktiandi said.
“Malaysia and the US managed to make trade deals that establish good groundwork for economic growth,” he said.
He added that many multinationals operating in Malaysia are still holding sizeable reserves of foreign currency and have yet to convert them into ringgit. If these firms eventually do so, the resulting demand for ringgit in the local market would lift the currency.