The market bias for the INR to SGD exchange rate is bearish, indicating a potential further weakness in the Indian Rupee. Key drivers influencing this outlook include the interest rate differential, with the Reserve Bank of India maintaining less aggressive policies compared to the Monetary Authority of Singapore's stable stance. This disparity is significant as Singapore's economic growth forecasts have been upwardly revised, which bodes well for the Singapore Dollar. Additionally, structural factors, such as mounting foreign portfolio outflows affecting the INR, are notable.
Over the next 1-3 months, the INR to SGD is expected to trade within a stable range, reflecting current volatility levels. Upside risks include potential positive developments from a US-India trade deal that could strengthen the INR, while downside risks stem from continued pressure on the INR due to global market dynamics and limited intervention by Indian authorities. Recent INR rates show it trading lower than its 3-month average, reinforcing bearish sentiment.