The recent performance of the Singapore Dollar (SGD) against the Hong Kong Dollar (HKD) reflects the latest developments in both economies. Currently, the SGD to HKD exchange rate stands at 5.9788, which is just 1.0% below its 3-month average of 6.0382, indicating stability within a narrow trading range of 3.2% (between 5.9440 and 6.1328).
Analysts have noted that the Monetary Authority of Singapore (MAS) has retained its monetary policy settings, providing a degree of confidence in the Singaporean economy's resilience despite external pressures. With Singapore's GDP growth surpassing expectations at 2.9% year-on-year in the third quarter of 2025, the economy shows robust performance, which could help support the SGD. However, a downward revision of the MAS’s core inflation forecast points to easing inflation, which may influence future monetary policy decisions.
On the other hand, the Hong Kong Dollar has faced challenges recently. The Hong Kong Monetary Authority (HKMA) reduced its base interest rate to 4.50% in response to the U.S. Federal Reserve’s cuts. This marks an important pivot in monetary policy that could weigh on the HKD. The HKMA has also been actively intervening in the foreign exchange market to defend the currency peg, indicating pressures on the HKD due to market fluctuations and currency dynamics.
Forecasters believe the recent interest rate cut by the HKMA, combined with the SGD's relative strength due to strong economic growth, may lead to a modest appreciation of the SGD against the HKD in the near term. Continued vigilance and potential policy adjustments from both central banks will be essential factors to watch, as global economic conditions and domestic challenges unfold.
