The INR to SGD exchange rate has recently been influenced by a combination of significant developments affecting both currencies. Analysts note that the Indian Rupee (INR) has hit a record low of 90.42 per U.S. dollar, marking a 5% depreciation in the past year. This decline is largely attributed to India's widening trade deficit, further worsened by a substantial 50% tariff imposed by the U.S. on Indian exports. The demand for foreign currency driven by these factors is putting considerable pressure on the rupee, compounded by foreign investment outflows that have seen nearly $17 billion withdrawn from Indian equities this year.
In light of these challenges, the Reserve Bank of India (RBI) has adjusted its stance, allowing the rupee to weaken as it focuses on managing volatility instead of defending a specific exchange rate. Projections from India's largest private lender suggest that without a swift resolution of trade disputes with the U.S., the rupee could fall to 92 against the dollar. This negative outlook casts a shadow over the INR’s potential against the Singapore Dollar (SGD).
On the other hand, recent updates regarding the Singapore Dollar indicate a relatively stable economic environment. The Monetary Authority of Singapore (MAS) has made adjustments to its monetary policy, initially easing it in January by flattening the slope of the SGD policy band to stimulate growth amid weaker inflation projections. Following a robust economic performance, with a third-quarter growth rate of 2.9% that exceeded forecasts, MAS has since maintained a stable policy stance.
Despite facing external pressures, including increasing U.S. trade tensions that could impact key exports, Singapore’s economic outlook remains resilient. MAS’s stable inflation projections have played a crucial role in supporting the SGD as it holds its ground against potential external shocks.
Currently, the INR to SGD exchange rate is near 14-day highs at approximately 0.014438, which is just 0.9% below its three-month average of 0.014573. The pair has been trading in a relatively stable range of 4.4% over the past few months, suggesting some level of market confidence despite the underlying pressures facing the INR.
In conclusion, while the SGD appears to be in a more favorable position due to stable economic indicators, the INR's outlook remains clouded by trade challenges and policy adjustments that could further influence its exchange rate trajectory.
