The Singapore Dollar (SGD) has experienced a relatively stable currency environment recently, influenced largely by monetary policy adjustments from the Monetary Authority of Singapore (MAS) and positive economic forecasts.
In April 2025, the MAS eased its monetary policy for the second time that year. This adjustment reduced the rate of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) policy band, a move aimed at supporting the economy amid global uncertainties. In the following months, specifically in July and October, the MAS held its monetary policy steady. Despite external trade tensions, MAS noted resilient economic growth, suggesting confidence in the domestic economy. These policy decisions highlight the authority's focus on maintaining a balance between sustaining economic growth and managing inflation.
Recent economic data supports this cautious optimism. Private-sector economists have upgraded Singapore's growth forecast for 2026 to 2.3%, up from an earlier prediction of 1.9%. This upward revision comes as a result of strong performances in non-oil domestic exports and manufacturing sectors, which are key components of Singapore's economy. The MAS also indicated that while core inflation is expected to moderate in the near term, there may be a slight uptick later in 2025 as temporary factors affecting inflation begin to wane.
In terms of exchange rate forecasts, the Financial Forecast Center anticipates that the SGD to USD exchange rate will average around 1.302 in January 2026, indicating a gradual appreciation trend throughout the year. As of now, the SGD to USD sits at 0.7780, which is just 0.8% above its three-month average of 0.7716, having traded within a stable 1.9% range from 0.7644 to 0.7792.
The SGD to EUR exchange rate is currently at 0.6608, slightly below its three-month average, showing the currency’s stable performance within a 1.1% range from 0.6593 to 0.6664. The SGD to GBP stands near 60-day lows at 0.5758, which is 0.7% below its three-month average and has traded in a stable 2.3% range from 0.5741 to 0.5873. Conversely, the SGD to JPY is at 121.4, representing 7-day lows and 2.1% above its three-month average of 118.9. It has maintained a relatively stable trading range of 114.2 to 122.1.
Overall, the Singapore dollar's performance reflects a cautious yet optimistic outlook, bolstered by MAS's careful management of monetary policy in response to economic conditions. For retail FX players, small businesses, expats, and travelers, understanding these dynamics will be crucial in navigating international transactions in the coming months. Monitoring these developments can potentially help in minimizing costs related to currency exchange and planning for future financial strategies. As the global economic landscape continues to evolve, keeping an eye on SGD movements will be essential for making informed decisions regarding foreign transactions.
