KUALA LUMPUR (April 14): The ringgit strengthened to its firmest point so far today against the Singapore dollar at 2.8559 after the Monetary Authority of Singapore curbed the currency's appreciation.
Singapore uses the Singapore dollar nominal effective exchange rate (S$NEER) scheme to manage the Singapore dollar's rate against a basket of world currencies.
In a statement today, the Monetary Authority of Singapore said it would set the appreciation rate of the S$NEER policy band at 0% from today.
"This is not a policy to depreciate the domestic currency, and only removes the modest and gradual appreciation path of the S$NEER policy band that was in place," the Monetary Authority of Singapore said.
At 10:10am, the ringgit was trading at 2.8681 against the Singapore dollar. The exchange rate was between 2.8559 and 2.8716 so far today.
Analysts foresee near-term depreciation of the Singapore dollar following the Monetary Authority of Singapore's move.
"We see some further risk of depreciation in the near term, but not so much from this mild shift in policy but from the risk that expectations of further easing this year could increase," Nomura wrote in a note today.