The current exchange rate for SGD to INR is at approximately 68.67, marking a significant increase of 1.8% above its three-month average of 67.42. This rate is at a 90-day high, indicating heightened volatility within a stable range of 66.23 to 68.67 over recent months.
Analysts highlight that Singapore's monetary policy plays a crucial role in the Singapore dollar's performance against the Indian rupee. In April, the Monetary Authority of Singapore (MAS) eased its monetary policy, reflecting concerns over diminished domestic demand and global economic conditions. Subsequently, MAS maintained its easing stance following moderate growth reports, leading some economists to predict a possible continuation of this trend amid worries about a negative output gap. As traders closely watch these developments, the sentiment around the SGD remains cautious, particularly in light of bearish positions on regional currencies linked to China's economic performance.
On the Indian side, the rupee's recent decline has been attributed to increased dollar purchases from oil importers, leading to an exchange closing at 87.2700 per U.S. dollar. However, foreign banks have provided some support through dollar sales, which has created conflicting dynamics for the INR. The upcoming imposition of a 25% tariff on Indian goods by the U.S. could exert further pressure on the rupee, complicating the already murky economic outlook.
Despite these pressures, there have been factors potentially bolstering the INR. Proposed tax cuts by Prime Minister Modi are expected to stimulate the Indian economy and consumer spending. Additionally, easing geopolitical tensions surrounding India's oil trade with Russia have contributed to a more favorable outlook for the rupee.
Overall, the SGD to INR exchange rate reflects a complex interplay of monetary policy, international trade dynamics, and geopolitical developments. As the Singapore dollar faces both external pressures and internal policy adjustments, stakeholders in currency markets will need to remain vigilant, considering the implications of these events on future exchange rate movements.
