The ringgit is back on track after several years of significant weakness. Last year, the value of SGD was so high that SGD 1 was equal to RM3.50, far higher than the normal 1:3 level that had lasted for many years.
Now, the ringgit has risen back to RM3.17, signaling the possibility that we will return to the normal 1:3 ratio.
The previous weakness of the ringgit occurred due to two main factors.
First, the United States aggressively raised interest rates, causing global investors to shift funds to USD, thus weakening the ringgit and having a slight impact on Malaysian exports.
Second, Malaysia's unstable politics after the general election saw no clear Prime Minister, thus increasing economic uncertainty and deterring investors from making decisions. The combination of these two factors pushed the ringgit to its weakest level in several years.
Since mid-2024, Malaysia has entered a new phase of greater stability. Politics is stronger, the economy has recovered more than expected, and major projects such as the Johor–Singapore Special Economic Zone have been launched, sending positive signals to investors.
Malaysia also received global praise after hosting the ASEAN Summit 2025, which boosted international investor confidence. This contributed to the natural strengthening of the ringgit.
Although the ringgit strengthened, it was actually just a price correction back to normal levels.
The exchange rate baseline for many years has been between RM2.95 and RM3.10 for each SGD. The previous phase of RM3.40–3.50 was unusual and could be considered a ‘honeymoon’ for Singaporeans. Therefore, the current appreciation of the ringgit is normal and healthy, not an unusual phenomenon.
Can the Expectation of 1 SGD = RM4.00 Happen?
For those hoping for 1 SGD to be equal to RM4.00, that possibility is quite unlikely at the moment.
Such an exchange rate only occurs during major shocks, such as aggressively raising US interest rates or political instability in Malaysia. Instead, a more realistic target is to maintain the rate around 1:3.
If the ringgit continues to strengthen too much, it could also have several side effects.
Singaporeans may find it less worthwhile to come to Malaysia for shopping or tourism, while Malaysians may be less interested in working in Singapore despite the high salaries on offer.
The rise in the ringgit against the SGD is not an unusual phenomenon or something amazing. It is simply a price correction after the ringgit has been depreciating for more than a year. Malaysia is now more stable, the economy is recovering, and investors are starting to regain confidence, making the ringgit strengthen to normal levels again.
