Recent currency market developments indicate a notable interplay between the Singapore Dollar (SGD) and the Indian Rupee (INR), as analysts assess the implications of economic policies and external factors on exchange rates. The SGD has been performing strongly, recently reaching 30-day highs around 68.34 INR, operating within a stable 2.4% range between 67.60 and 69.22. Remarkably, this reflects an alignment with its three-month average, suggesting a period of relative stability.
The Monetary Authority of Singapore (MAS) made significant monetary policy adjustments in 2025, including easing its policies due to earlier forecasts of subdued GDP growth of 0%-2%. However, as of October, MAS noted stronger-than-expected growth of 2.9% year-on-year in Q3, leading to a revised growth forecast of 1.5%-2.5% for the year. This optimistic outlook, combined with the SGD's emerging status as a safe haven amid global uncertainties, has bolstered the currency against peers like the INR.
Conversely, the INR has faced challenges recently, highlighted by its decline to an all-time low against the US dollar in September. This setback has been attributed to multiple factors, including hikes in US H-1B visa fees and diminished foreign equity inflows. The Reserve Bank of India (RBI) has intervened by expanding its short dollar forward positions, indicating proactive measures to stabilize the rupee as strong importer demand for dollars continues to pressure the currency.
Weak exports and a narrowing policy rate differential with the US add further strain on the INR. Analysts point out that the combination of subdued manufacturing growth and reduced foreign direct investment could perpetuate the rupee's vulnerability. With persistent challenges, economists project ongoing downside risks for the INR compared to the SGD.
Market forecasters believe that the SGD's resilience, aided by a recovering domestic economy and its safe-haven characteristics, may continue to support its strength against the INR in the near term. As the dynamics of both currencies evolve, businesses and individuals engaged in international transactions should remain vigilant and consider these factors as they plan ahead.
