Will a stronger ringgit bring Malaysians home?

JOHOR BAHRU/SINGAPORE – When Malaysian tour executive Loo Yong Tat converted a portion of his monthly Singapore salary to Malaysian ringgit recently, he felt shortchanged.

For most of 2024, Mr Loo’s remittance of $2,000 was worth around RM6,800 after conversion, and could cover his family’s home expenses in Kulai, Johor, and support his elderly father and a brother.

With the ringgit trading at around 3.20 against the Singapore dollar as at Nov 18, he now loses around RM400 when converting the same amount.

Like Mr Loo, Malaysians working in Singapore who were polled by The Straits Times say they are feeling the “loss” from the appreciating ringgit even more now. However, this is still not enough to deter them from working in the Republic.

“I’m not much affected, since I have worked in Singapore since 2009,” Mr Loo told ST.

“At that time, the exchange rate was only $1 to RM2.40. So now, even 1:3 to me is good enough.”

The

ringgit’s recent strong performance

has raised questions about whether those who cross the Causeway in search of higher wages will now stop doing so, and head home to work instead.

Workers and industry observers on both sides of the Causeway told ST that it is still too early to tell.

In a post on the Malaysia-Singapore Border Crossers Facebook group, some users have pointed out that the current conversion rate for the two South-east Asian currencies is still among the highest in decades.

“I’ve felt what it was like when it was 2.25, 2.44 between 2000 and 2010,” said Facebook user Shahril Umf. “Only after 2020, we started seeing the rate reach up to 3.00.”

Singapore has the largest Malaysian diaspora community. A total of 1.13 million out of 1.86 million Malaysians who have migrated overseas are residing in Singapore as at 2022.

The migration trend has yet to abate among Malaysians, as the cost of living in Johor Bahru remains relatively high.

Recruitment consultant Shawn Moo, 27 who works in Singapore, said living expenses in Malaysia must decline before he considers moving to JB, where he has bought a house.

“In Johor Bahru for instance, it is very expensive to eat outside food. Just a curry noodle in a cafe will cost from RM10 to RM25,” he said.

Travel industry executive Shernice Chong, a Johorean who has worked in Singapore since 2012, said that if the exchange rate falls below 2.80, it may be convincing enough for her to seek work in the southern Malaysian state.

“But I will probably jump to another industry as the travel industry in Johor doesn’t make a lot of money,” said the 33-year-old mother of two.

She said she wouldn’t mind earning less in that case, as working in Johor would mean she no longer needs to go through busy checkpoint traffic daily to work in Singapore.

According to Malaysia’s Department of Statistics, Johor topped the list of year-on-year inflation rate among Malaysia’s states. In September 2025, it recorded an inflation rate of 2 per cent.

In comparison, the country’s most industrialised state Selangor was ranked third (1.8 per cent) while capital Kuala Lumpur placed 8th (1.3 per cent).

Analysts expect the ringgit to trade between RM3.20 and RM3.30 versus the Singapore dollar

by the end of 2025

, before strengthening further in 2026. This will mostly be driven by the ringgit firming versus the US dollar, due to inflow of investments.

Other factors included a more investor-friendly climate under Prime Minister Anwar Ibrahim’s administration, Malaysia’s economic growth and the country’s strengthening exports.

Ms Suen Bonh, president of the 600-strong Malaysian Association in Singapore, told ST that the ringgit’s recent appreciation has drawn mixed sentiment among its members: While some are bothered by the lower amount they get now after converting Singapore dollars to ringgit, others believe the Singapore currency will remain strong enough to warrant earning in Singapore dollars.

“Those who regularly send money back to family, for savings or to pay off mortgages” and “those who plan to eventually return to Malaysia” are pleased because their purchasing power back home remains strong, she said.

For permanent residents, or those with families and long-term commitments in Singapore, the impact of a recently firmer ringgit is felt less, she added.

“Many see exchange rate as a proxy for economic confidence, but most members do not yet assume it will remain stable, (as) many feel it’s temporary and not structural,” Ms Bonh said.

Mr Teh Kee Sin, adviser of the Small and Medium Enterprise Association of South Johor, said for Malaysians, the attractiveness of work in Singapore goes beyond the exchange rate.

Workers also enjoy greater exposure to work in multinational firms, plus there is the existing pay gap for certain jobs in the two countries.

For example, a software engineer in Kulai town – an emerging tech hub dotted with data centres 36km north-east of JB – can earn RM7,937 monthly, according to job-listing platform Indeed.

The salary for a similar job in Kuala Lumpur ranges from RM5,873 to RM15,000.

In Singapore, a similar position could pay $6,125 – more than twice the average in Kulai, and more than in Kuala Lumpur.

To convince Malaysians to return home takes more than a better exchange rate. A more stable ringgit overall would help, rather than just short-term spikes, said Ms Bonh.

She said the Malaysian job market must also offer competitive salaries and good career progression.

“Many often (informally say) that breaking below RM3 (per S$1) would be a powerful signal and would cause serious reconsideration, as it fundamentally alters the long-held ‘three times multiplier’ many have in mind,” she said.

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