Once again the Singapore dollar (SGD) hit an all -time high against the Malaysian Ringgit (MYR) on Monday, 23 May.
MonFX's chief foreign exchange (FX) analyst, Simon Harvey, reported that the SGD reached a high of RM3.1964 at noon on Monday before retreating slightly to RM3.1950.
In addition to Singapore’s monetary policy factors, Harvey also noted in his note that positive sentiment in Beijing after President Joe Biden considered tariff cuts on Chinese goods had pushed the Yuan to record highs, lifting the SGD with it.
This is because the Yuan is the largest holder in the *S $ NEER of Singapore, and rallies in the Yuan pushed the SGD to surge as currency investors were seen offsetting the depreciation of the SGD against the Yuan against other currencies.
* S = Singapore, the nominal exchange rate (NEER) is the amount of domestic currency required to buy foreign currency.
This also indirectly saw the SGD strengthen against other trading partners including the US dollar (USD), MYR, Hong Kong dollar (HKD) and Japanese Yen (JPY).
Meanwhile, Singapore tightened its monetary policy last April, built on policy movements in October 2021 and January 2022, aimed at slowing inflationary momentum and stabilizing prices.
To the best of our knowledge, Singapore’s core inflation has increased to 3.3% on a year -on -year basis in April 2022 from 2.9% in March.
It rose to its highest level since February 2012 due to high inflation for food, groceries and electricity as well as gas.
