Report: Singapore dollar seen rising further, may reach parity with US dollar
The Singapore dollar is reportedly expected to rise further against the US dollar in the coming months, despite a recent surge driven by optimism over easing trade tensions, analysts said.
According to a report in Channel News Asia (CNA), one economist believes the two currencies could eventually be valued equally.
The Singapore dollar is reportedly trading at around 1.29 to the greenback, after reaching a 10-year high of 1.28 last year.
Christopher Wong, an foreign exchange (FX) strategist at OCBC, noted that the Singapore dollar has appreciated by about 5.8 per cent so far this year, according to the report.
“This was due to a sharp US$ sell-off and signs of tariff de-escalation,” he was quoted as saying.
He reportedly added that optimism over US-China talks and possible trade agreements has also lifted other Asian currencies.
Saktiandi Supaat, Maybank’s head of FX research, reportedly said that “there is a diversification away from the US$ and the S$ appears to be one of the beneficiaries of this theme.”
He also said Singapore’s stable monetary policy and strong economic fundamentals have made the Singapore dollar more attractive to investors.
Meanwhile, Bank of Singapore chief economist Mansoor Mohi-uddin reportedly said it is possible the Singapore dollar could eventually match the value of the US dollar “in our lifetimes”.
“If Singapore continues to run very large current account surpluses and continues to attract very large capital inflows owing to its status as a global financial centre, then the underlying path of the S$ will remain upwards against the US$,” he was quoted as saying.
However, analysts said potential global financial shocks and the continued dominance of the US dollar as the primary reserve currency could pose challenges.
Saktiandi reportedly warned that Singapore may face difficulty overcoming certain risks and its achievements with its currency should not be taken for granted.
(Source:MalayMail)
