Still Value For Money Why Singaporeans Keep Crossing The Causeway Despite A Stronger Ringgit

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A general view shows the Johor Causeway at Johor Bahru on November 4, 2022. — Picture by Yusof Mat IsaJOHOR BAHRU, Nov 1 — Despite the Malaysian ringgit surging to its strongest level against the Singapore dollar in over a year, Singaporean visitors say it was not enough to deter them from their regular trips across the Causeway for shopping, dining, and services.
“For me, it doesn’t matter because I don’t spend much here,” said Edmund Lee, a Singaporean finance worker who crosses into Johor Bahru every few weeks for groceries and meals. 
Like many others, he feels the “value for money” proposition of Malaysia remains intact, Channel News Asia reported.
This resilience from its most important tourism market is a crucial buffer for Malaysia as it navigates the complex economic impact of its resurgent currency, which is creating a sharp divide between domestic winners and struggling exporters.
The ringgit’s rally has been stark. After sinking to a 26-year low against the US dollar in February 2024, it has bounced back to a one-year high. Against the Singapore dollar, it has strengthened from around RM3.50 in January 2024 to RM3.19 this week.
Lifeline for Johor
Businesses in Johor Bahru that rely on Singaporean customers have seen little to no impact. 
At a car wash less than a kilometre from the Woodlands Causeway, manager Ramesh Ponnayah says the number of Singaporean patrons has been unchanged.
“Demand from Singapore continues to be strong,” confirmed Ivan Teo, chairman of the Malaysian Association of Hotels’ Johor chapter. 
He said that while Johor is bracing for a 25 per cent dip in tourism from more currency-sensitive markets like Indonesia and Thailand, the steady flow of Singaporean visitors, who have higher purchasing power, is a saving grace.
Domestically, the stronger ringgit is a clear boon. Importers like garment maker Chua Hunt are enjoying lower costs for materials from China, allowing them to upgrade their quality. 
Consumers are also benefiting from increased spending power, with motorcycle dealers reporting more customers upgrading to bigger bikes.
However, the rally is a significant headwind for Malaysian exporters. 
Economists say industries like furniture and gloves now face a “double-whammy” of a strong currency making their products more expensive for foreign buyers, coupled with existing US tariffs.
Analysts attribute the ringgit’s strength to two main factors: the anticipation of interest rate cuts by the US Federal Reserve, which makes emerging market currencies more attractive, and the Malaysian government’s successful fiscal reforms, including subsidy rationalisation, which have boosted investor confidence - malaymail

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