Ok, ok. So, today's rate is S$1=RM3.037. I think the fair rate should be S$1=RM2.40 or thereabout. If the Ringgit is too low, it's not good for the country also. Can you do something on this?
From selfish reasons, which I hope S$ grow as strong as ever.
However from pure business point of view, I really do not mind if RM go low. We have seen RM that went 4.80 to USD or 6.80 vs GBP before. Short term a low RM is going to hurt the pockets but an exporting economy like Malaysia is benefiting from increased FDIs. People will not get very rich but they will have jobs to do and that keep them moving. Today, you do not hear people walking on the streets that they do not have jobs, unlike 1997. Yes there are retrenchments especially in those E & E sectors, but they do get reemployed quickly.
Manufacturing do not get hit easily by forex fluctuations. Maybe they are low costs and expectations are lower. Let me share my experience just 2 days ago. I paid a bill in USD and the exchange rate was RM 4.195 vs USD. My original cost was based on RM 3.60. Bloody awful and if you are treading on thin ice. As an importer, it is definitely not good news.
But as in all manufacturing, materials consist of as rule of thumb is 50 to 60% of the cost, the rest is process costs, overheads and profits. So the damage is lesser than actually seen. However, when you export, you sell in USD and your base price is based on RM3.60 then. So it is not all that bad. In fact if you are an exporter, it is very profitable.
RM went down due to lack of demand, confidence, lack of revenue while S$ held steady, I guess due to MAS intervention. Bank Negara do not want to intervene, it allow it to flow naturally. So is it a fair value or not, good or bad, it all has to do with dynamics of the world economy versus home ground situation. Every country is different, inflation, attractions, competitive strategies, etc.