The exchange rate forecast for Singapore Dollar (SGD) to Indonesian Rupiah (IDR) remains influenced by a combination of monetary policy decisions and economic conditions in both countries. Recent updates indicate that the Monetary Authority of Singapore (MAS) implemented a more accommodative monetary policy by reducing the slope of its exchange rate policy band in January 2025, aimed at stimulating economic growth in response to lower-than-expected inflation. By October, MAS maintained its policy stance while reporting robust economic growth of 2.9% year-on-year in the third quarter, surpassing expectations. Despite concerns over trade tensions, particularly with the U.S., which could pose risks to Singapore's export-driven economy, the SGD has traded within a stable range of 1.8% over the past three months, currently at 12,910 IDR.
On the other hand, the Indonesian Rupiah is facing pressures from both domestic and external factors. Bank Indonesia's Governor has announced plans to strengthen the IDR, with an ambitious target of 16,500 per U.S. dollar in the coming year. However, the central bank paused interest rate cuts in October to assess the effects of prior reductions, which indicates a cautious approach amid ongoing market volatility. Protests in Jakarta earlier in the year contributed to market instability, leading to slight depreciation against major currencies. Additionally, global pressures, including interest rate hikes by the U.S. Federal Reserve, have further complicated the IDR's outlook.
Analysts suggest that the SGD's relative strength and MAS's proactive approach could lend support to the SGD/IDR exchange rate in the near term, especially if Singapore's economic growth continues to outperform expectations. However, underlying vulnerabilities in Indonesia's economic landscape and potential shifts in U.S. monetary policy will be crucial for the rupiah's trajectory. The current exchange rate reflects a slight premium over the three-month average, indicating stability, but future developments should be monitored closely as global and regional dynamics evolve.
