S'pore money changers reluctant to sell ringgit as they lose money at this S$1 to RM3.23 level

3 days ago 33

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The Singapore dollar has appreciated against the Malaysia ringgit again, hitting a record high of S$1 to RM3.23 on Aug. 3, 2022, to loud cheers from Singaporeans who enjoy their Johor Bahru excursions, but to the chagrin of money changers.

The Singapore dollar hit the new high after starting the year at RM3.0857.

Long queues for ringgit

The New Paper reported that long queues formed at money changers at The Arcade in Raffles Place on Aug. 4, but that has more to do with a shortage of supply of ringgit on sale, rather than ringgit selling like hotcakes.

Apparently, money changers are not willing to let go of their ringgit as its price has depreciated again, which will lead them to make losses by virtue of the currency's depreciation.

It was explained that money changers bought their ringgit at a much higher price earlier, even though the currency was purchased in bulk.

And selling the ringgit now would not make sense as it will only make them busy without making money on it.

The only option for a ringgit sale is to sell them in bulk in as few transactions as possible to other money changers who want it.

However, money changers still accept ringgit for Singapore dollars.

Chump change profits

It was also explained that small-scale money changers are finding it hard to profit from selling ringgit now, as sales have to be millions of dollars worth before they see significant profits.

One money changer shop owner said for every RM100,000 (S$30,947) sold, money changers earn no more than between S$10 and S$30.

Moreover, in a venue like The Arcade, a saturation of money changers only makes the situation worse as they are all competing with one another, leading to downward pressure on prices of currencies.

And with the uptick in demand, it gets even more crowded but the reward for working hard to sell ringgit does not make economic sense as profits are too puny.

Those that do still sell ringgit either do so in smaller quantities, or ...

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