Singapore Causeway Jam

Traffic at Singapore Causeway – Image from Straits Times

More Singaporeans are heading to Malaysia during the June holidays, as the exchange rate hit a new low, according to travel agencies. The ringgit stood at 2.78 against the Singapore dollar on Wednesday (Jun 10, 2015), as travel agencies reported a 10 per cent spike in bookings for Malaysia travel packages for the June holidays, as compared to last year. Travel agencies also reported that 15 per cent of the travellers made last-minute bookings for tours in Malaysia.

“We have received an increase in enquiries on travelling to Malaysia. The number of tourists heading to Malaysia has increased 10 per cent. Most of them travel to Johor Bahru, Kuala Lumpur, Malacca, Penang, Langkawi and Kuching,” said Ms Rebecca Chia, marketing communication executive at Chan Brothers Travel.

Long queues were also spotted at money changers at Raffles Place on Wednesday, with some offering 2.76 ringgit for one Singapore dollar. Some money changers told Channel 8 that from end-May to June, the demand for ringgit doubled, as compared to April. Some money changers also reported that they ran out of the currency by early afternoon on Wednesday.

Analysts have predicted that the ringgit could slide further to 2.8 against the Singapore dollar this month. However, they added that there could still be a possibility for a rebound and the exchange rate would not decrease drastically in near future, depending on the performance of the greenback and oil prices. The exchange rate could also depend on Malaysia’s political situation and whether the Fed increases interest rates this year.

“You might see a bit of continued sort of weakness to some extent, largely because of the dollar’s strength,” said Mr Saktiandi Supaat, head of FX Research, Global Markets, at Maybank. “In our view, it would probably continue to some extent over the next three months, largely because of the expectations that the US data might improve significantly.” – The Straits Times.