The ringgit declined 0.2% against the Singapore dollar to 3.2162 on Wednesday, its lowest level since November, as stock outflows extended into a second consecutive month, according to Bloomberg.

Singapore’s currency remained supported by the central bank’s monetary policy tightening stance.

"Expectation of further tightening of the Singapore dollar nominal effective exchange rate policy at the October meeting is supportive for the Singapore dollar, while the safe-haven status is back into play on renewed geopolitical uncertainties," said Wee Khoon Chong, senior market strategist for Asia Pacific at BNY in Hong Kong.

The moves reflect the "relative advantage of the Singapore dollar over an equally supportive ringgit," he added.

Fiscal concerns have also contributed to investor caution, with traders monitoring the impact of subsidies on the country’s fiscal position after Malaysian Prime Minister Anwar Ibrahim restored subsidized fuel quotas despite elevated energy prices.

Still, the ringgit could find support from Malaysia’s strong economic growth, aided by the artificial intelligence boom, which prompted Bank Negara Malaysia to signal a hawkish pivot last week.

Meanwhile, Singapore’s strong economic outlook and policy tightening by the Monetary Authority of Singapore are providing support for the local currency.

The central bank tightened monetary policy for a second consecutive review in July, increasing the rate of appreciation of the local dollar against its trade-weighted currency basket, according to Reuters.

Malaysian ringgit banknotes in Kuala Lumpur on June 29, 2015. Photo by AFP

Sheana Yue, senior economist at U.K.-based research firm Oxford Economics, said earlier that Singapore's latest tightening reflects its focus on medium-term inflation risk rather than recent inflation outturns.

"Inflation has so far remained benign. But higher crude and refined fuel prices are likely to feed through into domestic fuel, freight and imported goods costs, keeping inflation risks tilted to the upside," she said, as quoted by The Straits Times.

The Singapore dollar’s strong inverse relationship with the greenback is also supporting the currency. The Singapore dollar-ringgit pair is particularly significant given the two countries’ close trade ties and their connection through one of the world’s busiest land borders.