Recent forecast analysis suggests a mixed outlook for the SGD to THB exchange rate, reflecting developments in monetary policy, economic growth, and external factors influencing both currencies. Currently, the SGD/THB pair is trading at 90-day lows around 24.34, which is 2.2% below its 3-month average of 24.9, while it has fluctuated in a stable range of 24.34 to 25.32.
For the Singapore Dollar, the Monetary Authority of Singapore (MAS) has recently adjusted its monetary policy to support economic growth, allowing for a more gradual appreciation of the currency in response to lower-than-expected inflation. In contrast, the Thai Baht has seen its strength negatively impact key economic sectors, including tourism and exports, prompting the Bank of Thailand to implement measures to curb its appreciation. These include proposals to increase thresholds for foreign income reporting and potential interest rate cuts of 25 basis points to stimulate growth amid ongoing economic challenges.
Inflation trends diverge as Singapore maintains a stable inflation outlook, whereas Thailand is grappling with negative inflation for the eighth consecutive month due to declining energy prices. This disparity may further complicate the THB's recovery against the SGD, particularly with a projected economic growth rate of just 2% for Thailand.
Additionally, the current volatility in oil prices, which have recently dropped to 30-day lows near $61.20—4.9% below their 3-month average—could significantly impact Thailand, a net oil importer. As oil prices decline, the potential for further pressure on the Thai currency exists, especially if economic conditions worsen.
Overall, analysts caution that while the SGD may have some upward momentum due to MAS's policies, the structural challenges in the Thai economy may limit the strength of the THB against the SGD going forward. As both economies navigate external pressures, including U.S. trade tariffs and global inflationary trends, market participants should remain vigilant for disruptions or shifts that may impact this exchange rate dynamic.
