The AED to SGD exchange rate has recently shown resilience, trading at 14-day highs around 0.3537, which is approximately 0.9% above the three-month average of 0.3507. This movement reflects a stable trading range within 1.9%, highlighting a relatively balanced market sentiment for both currencies.
Analysts point to several factors influencing the UAE dirham. The recent currency swap agreement between the UAE and Turkey, valued at 18 billion AED, aims to bolster local currency liquidity, potentially enhancing cross-border trade and financial transactions. This liquidity expansion is expected to stabilize the AED against various currencies, including the SGD. Moreover, a positive report from the IMF forecasting a 4.8% GDP growth for the UAE in 2025 underscores the strong economic fundamentals supporting the dirham, which could reinforce its value in the currency markets.
Conversely, the Singapore dollar has demonstrated resilience amid steady economic performance. The Monetary Authority of Singapore (MAS) has maintained its monetary policy settings, reflecting confidence in the economy despite global challenges. The latest GDP growth figure of 2.9% for Q3 2025 exceeded expectations, indicating robust economic activity. However, the recent downward revision of core inflation forecasts by MAS may have implications for any future currency policy adjustments, as easing inflation could affect the SGD's exchange rate dynamics.
The interplay between these two currencies suggests that while the AED may find support from fiscal policies and economic growth, potential external pressures related to U.S. tariffs could create volatility in the SGD, depending on how they impact Singapore's export-dependent economy. Therefore, market participants should monitor these developments closely, as both currencies navigate their respective economic landscapes.
