SGD/INR Outlook: The outlook for SGD/INR is slightly positive, but likely to move sideways, as the rate is above its recent average, yet lacks a clear driving factor.
Key drivers:
• The Monetary Authority of Singapore's (MAS) steady monetary policy and raised inflation forecasts indicate ongoing support for the Singapore dollar.
• Oil prices have been steadily above average, which generally strengthens the SGD against the INR, due to Singapore's status as an oil trading hub.
• India's widening trade deficit and substantial FPI outflows continue to apply downward pressure on the Indian rupee.
Range: The SGD/INR is likely to drift within the recent range, as it trades at a level higher than usual but lacks strong momentum for further upward movement.
What could change it:
• Upside risk: A significant improvement in global trade conditions could boost the SGD further.
• Downside risk: Continued foreign portfolio investment outflows from India could worsen the rupee's performance, undermining its value against the SGD.
