2024 is turning out to be a tumultuous year for the Malaysian Ringgit. The Ringgit recently made headlines as it rose to RM4.17 against the US dollars as of 2 October 2024 and became one of the top performing currencies in the world.
This is a huge improvement from just a few months ago in February 2024, when the Ringgit had sunk to RM4.80 against the greenback and was the second worst performing currency after the Japanese yen.
At the time, the weakened Ringgit had also declined to an all-time low RM3.50 against the Singapore Dollar. Capitalising on the high currency exchange at the time, many Malaysians were increasingly eager to cross the border to Singapore for work and earn in SGD.
With the rapidly appreciating ringgit, we look at how it may affect Malaysians who are working (or looking to find work) in Singapore?
Read Also: Working In Singapore But Living In Malaysia. Which Country Do You Have To Pay Taxes In?
Smaller Currency Gains
Many of us may be familiar with stories of educated Malaysians willing to take on lower-skilled jobs in Singapore, to take advantage of the high currency exchange. One of the stories that stood out was a 25-year-old in Johor who despite scoring 5As in SPM, wakes up at 5AM to travel to Singapore for his cleaning job that pays him RM8,000 – which is nearly four times higher than the average salary in Malaysia.
It’s also common for Malaysians living in Johor to go back and forth to Singapore every day for work. While they earn their salaries in Singapore Dollar, their cost of living is calculated in Malaysian Ringgit in Johor.
Additionally, some Malaysians may work and live in Singapore but they have families in Malaysia. The high currency exchange allows them to send money regularly to their loved ones.
As the Malaysian Ringgit regains its value against the Singapore Dollar, Malaysians working in Singapore will not be able to enjoy the record-low exchange rate. In fact, as of 14 October 2024, one Singapore Dollar buys about 3.29 Malaysian Ringgit. This is 21 sen less than when Singapore Dollar hit 3.50 against the Ringgit, which can add up to quite a lot.
Consider Returning To Malaysia?
One of the biggest factors that entice Malaysians to find jobs in Singapore is the currency exchange.
If the Ringgit continues to strengthen, there may be a possibility that Malaysian workers in Singapore would consider moving back to Malaysia.
With a smaller difference in currency value, they could feel that they want to explore job opportunities in Malaysia and be close to their families. In the example above, rather than taking on lower-skilled jobs in Malaysia, where the career growth prospects are limited, Malaysians may be more willing to take on higher-skilled roles that may pay slightly lower at the start, but with much more attractive growth prospects. The opportunity cost in the immediate-term may not be as great anymore.
Nevertheless, we’re still in the early days of the strengthening Ringgit. Historically, the Singapore Dollar has outperformed the Malaysian Ringgit over the last 20 years. A short-term reversal in this trend should not be the impetus to upend your lives. Perhaps this is a trend more Malaysians will be monitoring with a view to making career switches back to Malaysia.
There are also other factors to consider that influence Malaysian workers to stay in Singapore such as higher salary, more quality job opportunities and quality of life.
More Worthwhile To Spend In Singapore
When the Malaysian Ringgit strengthens, it means that it becomes higher relative to other currencies. Naturally, it becomes cheaper to buy goods or services overseas including Singapore.
Take the example of buying a plate of char kuey teow in Singapore that costs S$4.50. With the previous exchange rate of S$1:RM3.50, the char kuey teow would have cost RM15.75 after conversion.
But with a currency exchange rate of S$1:RM3.30, the plate would cost only RM14.85 after conversion, which is RM0.90 cheaper.
As the ringgit strengthens, Malaysians working in Singapore might find it more worthwhile to spend in Singapore. This includes for those working in Singapore but living in Johor, especially on essentials like meals. Rather than waiting to cross the border back to Johor to dine at late hours, they may be more willing to dine in Singapore.
Some Malaysians working in Singapore could also be more open to spending on experiences in Singapore that are not available in Malaysia such as planning day trips to the Universal Studios or having a meal at popular French eatery Cedric Grolet.
Malaysians may even choose to live in Singapore or move their families to Singapore if the Ringgit appreciates and it becomes less costly to live in Singapore.
Read Also: 3 Popular Lifestyle Brands That Are Cheaper In Singapore Compared To Malaysia
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