Singapore Dollar Rally Against Ringgit Will Boost Johor Economy
The diminished value of the ringgit against the Singapore dollar presents an advantageous situation for Johor, making it a more attractive destination for Singapore investments while boosting exports to the country.KUALA LUMPUR: The diminished value of the ringgit against the Singapore dollar presents an advantageous situation for Johor, making it a more attractive destination for Singapore investments while boosting exports to the country.
Over the past few weeks the ringgit has hit new lows against the Singapore dollar.
Last Friday, the ringgit hit an all-time low of 3.5418 against the Singapore dollar.
Singapore was Johor's largest export market in 2022, according to Department of Statistics Malaysia, valued at RM92.7 billion. It made up 28.5 per cent of total exports.
It was the second largest import market, valued at RM45.5 billion. It made up 15.7 per cent of total imports.
Nusantara Academy for Strategic Research senior fellow Dr Azmi Hassan said the advantage of a lower ringgit value is particularly notable for Johor, as it enhances the competitiveness of its exports to Singapore.
"This competitiveness extends beyond exports, notably in the context of the new Johor-Singapore Economic Zone."The current exchange rate facilitates increased tourism from Singapore, where visitors find value for their money, thus contributing to the perceived stability of the ringgit," he told the Business Times.
He also noted that the influx of Singaporean tourists, attracted not only by shopping but also culinary experiences, further stabilises the ringgit due to increased demand.
"The onus is on Johor to capitalise on the current advantageous exchange rate, primarily concerning the Singaporean dollar," said Azmi.
He also emphasised that strategically drawing in additional Singaporean currency through tourism is a practical strategy.
"Considering the present exchange rate, Johor should broaden its focus beyond attracting Singaporeans solely for shopping and dining, extending this appeal to neighbouring regions such as Melaka.
"To fully leverage this opportunity, the Johor state government needs to prioritise initiatives that enhance satisfaction among Singaporean visitors, thus necessitating a comprehensive reevaluation and strategic repositioning concerning the low exchange rate of the ringgit versus the Singapore dollar," he continued.
Meanwhile, Malaysia University of Science and Technology economist Geoffrey Williams said the low ringgit against Singapore dollar will not have any effect on the on-going projects in Johor.
"The initiatives in Johor have a long-term perspective, making short-term exchange rates inconsequential. It would only become significant if the depreciation persists over an extended duration," he emphasised.
Williams explained that the limited impact of exchange rate fluctuations on trade is that imports and exports are influenced by long-term exchange rates, not solely the immediate spot rate.
"Frequently, contracts are agreed upon well in advance, based on earlier exchange rate values."Also even if the lower exchange rate makes imports more expensive it makes exports cheaper. So the trade flows continue to be strong."In investment terms you get more ringgit for Singapore dollars now so there may be an inflow of investment. Property for example is more affordable in Johor now to Singapore buyers," he added.
Williams highlighted that the extended depreciation of the ringgit has been advantageous for Johor as a trade and investment centre, and further depreciation would continue this positive trend.
Azmi however said more needs to be done to reduce the volatility of the SIngapore dollar to the ringgit.
"This volatility, subject to frequent fluctuations, creates a challenging environment for investors and business decision-makers dealing with transactions involving Malaysia, Singapore, or regions like Johor and Singapore."Addressing this issue is imperative, and there should be concerted efforts to stabilise the Malringgit against the Singapore dollar, considering this relationship is confined to the bilateral context of Singapore," he said.
Azmi said it is particularly crucial for attracting and retaining investors, especially within the context of the economic zone. - NST
Artikel ini hanyalah simpanan cache dari url asal penulis yang berkebarangkalian sudah terlalu lama atau sudah dibuang :
http://malaysiansmustknowthetruth.blogspot.com/2024/02/singapore-dollar-rally-against-ringgit.html