
Singapore Dollar Poised for Further Weakness Amid Policy Shifts
The Singapore dollar is expected to sustain its current downtrend as the Monetary Authority of Singapore (MAS) potentially shifts towards an easing stance, according to a recent report from Bloomberg. The anticipation comes as U.S. tariffs continue to impact the global economic landscape.
Currently trading near a two-year low against the U.S. dollar, the Singapore dollar has seen a flurry of bearish options bets, suggesting traders are preparing for the MAS's potential change in policy at their meeting slated for January 24, 2025. The consensus among 17 economists surveyed by Bloomberg suggests that the central bank could adjust its stance this month, although some analysts predict any shift might occur later in the year, providing a buffer to assess the implications of a possible Donald Trump presidency in the U.S.
Jennifer Kusuma, a senior rates strategist at ANZ Group Holdings Ltd., remarked that with core inflation in Singapore trailing below its long-term average, the MAS might consider a pre-emptive move to reduce the restrictiveness of its policy settings. "The MAS's focus will be on the downside growth risks in 2025, especially with potentially more protectionist US trade policy," she added.
Data from the IndexBox platform indicates that the Singapore dollar, which recently touched its strongest level against the greenback in a decade, has weakened to about 1.37 per dollar. A key factor in this depreciation is the declining core inflation rate, which has sunk below the 2% threshold considered stable by monetary officials.
Market watchers, including Lloyd Chan of MUFG Bank Ltd., anticipate that the MAS will relax policy by moderating the slope of the currency band. This view is shared by BNP Paribas SA, which projects the Singapore dollar will dip to 1.40 over the next year. Meanwhile, DBS Group Holdings projects the currency will drop to 1.39 by mid-2025, aligning with Goldman Sachs Group Inc.'s six-month target of 1.38.
For now, the central bank's parameter adjustments for the nominal effective exchange rate (S$NEER) remain speculative, as the MAS retains a degree of opacity regarding the details of its currency band mechanics.
Amidst these developments, Singapore's bond market remains strong, with local-currency corporate bond sales reaching a record S$31.2 billion in 2024. According to Bloomberg data, approximately one-third of this volume involved foreign borrowers.
As the situation unfolds, MAS will also have to consider the ramifications of U.S. trade policies on Singapore's economy, especially given China's significant presence in Singapore's trade network. Barclays recently estimated that the Chinese yuan comprises around 10% of MAS's currency basket, highlighting the interconnectedness of global trade dynamics and Singapore's monetary policy.
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1. INTRODUCTION
Making Data-Driven Decisions to Grow Your Business
- REPORT DESCRIPTION
- RESEARCH METHODOLOGY AND AI PLATFORM
- DATA-DRIVEN DECISIONS FOR YOUR BUSINESS
- GLOSSARY AND SPECIFIC TERMS
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2. EXECUTIVE SUMMARY
A Quick Overview of Market Performance
- KEY FINDINGS
- MARKET TRENDS This Chapter is Available Only for the Professional Edition PRO
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3. MARKET OVERVIEW
Understanding the Current State of The Market and Its Prospects
- MARKET SIZE
- CONSUMPTION BY COUNTRY
- MARKET FORECAST TO 2030
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4. MOST PROMISING PRODUCT
Finding New Products to Diversify Your Business
This Chapter is Available Only for the Professional Edition PRO- TOP PRODUCTS TO DIVERSIFY YOUR BUSINESS
- BEST-SELLING PRODUCTS
- MOST CONSUMED PRODUCT
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- MOST PROFITABLE PRODUCT FOR EXPORT
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5. MOST PROMISING SUPPLYING COUNTRIES
Choosing the Best Countries to Establish Your Sustainable Supply Chain
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- TOP PRODUCING COUNTRIES
- TOP EXPORTING COUNTRIES
- LOW-COST EXPORTING COUNTRIES
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6. MOST PROMISING OVERSEAS MARKETS
Choosing the Best Countries to Boost Your Exports
This Chapter is Available Only for the Professional Edition PRO- TOP OVERSEAS MARKETS FOR EXPORTING YOUR PRODUCT
- TOP CONSUMING MARKETS
- UNSATURATED MARKETS
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7. GLOBAL PRODUCTION
The Latest Trends and Insights into The Industry
- PRODUCTION VOLUME AND VALUE
- PRODUCTION BY COUNTRY
8. GLOBAL IMPORTS
The Largest Importers on The Market and How They Succeed
- IMPORTS FROM 2012–2024
- IMPORTS BY COUNTRY
- IMPORT PRICES BY COUNTRY
9. GLOBAL EXPORTS
The Largest Exporters on The Market and How They Succeed
- EXPORTS FROM 2012–2024
- EXPORTS BY COUNTRY
- EXPORT PRICES BY COUNTRY
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10. PROFILES OF MAJOR PRODUCERS
The Largest Producers on The Market and Their Profiles
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11. COUNTRY PROFILES
The Largest Markets And Their Profiles
This Chapter is Available Only for the Professional Edition PRO- United States
- China
- Japan
- Germany
- United Kingdom
- France
- Brazil
- Italy
- Russian Federation
- India
- Canada
- Australia
- Republic of Korea
- Spain
- Mexico
- Indonesia
- Netherlands
- Turkey
- Saudi Arabia
- Switzerland
- Sweden
- Nigeria
- Poland
- Belgium
- Argentina
- Norway
- Austria
- Thailand
- United Arab Emirates
- Colombia
- Denmark
- South Africa
- Malaysia
- Israel
- Singapore
- Egypt
- Philippines
- Finland
- Chile
- Ireland
- Pakistan
- Greece
- Portugal
- Kazakhstan
- Algeria
- Czech Republic
- Qatar
- Peru
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- Vietnam
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LIST OF TABLES
- Key Findings In 2024
- Market Volume, In Physical Terms, 2012–2024
- Market Value, 2012–2024
- Per Capita Consumption, By Country, 2018–2024
- Production, In Physical Terms, By Country, 2012–2024
- Imports, In Physical Terms, By Country, 2012–2024
- Imports, In Value Terms, By Country, 2012–2024
- Import Prices, By Country Of Destination, 2012–2024
- Exports, In Physical Terms, By Country, 2012–2024
- Exports, In Value Terms, By Country, 2012–2024
- Export Prices, By Country Of Origin, 2012–2024
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LIST OF FIGURES
- Market Volume, In Physical Terms, 2012–2024
- Market Value, 2012–2024
- Consumption, By Country, 2024
- Market Volume Forecast to 2030
- Market Value Forecast to 2030
- Products: Market Size And Growth, By Type
- Products: Average Per Capita Consumption, By Type
- Products: Exports And Growth, By Type
- Products: Export Prices And Growth, By Type
- Production Volume And Growth
- Exports And Growth
- Export Prices And Growth
- Market Size And Growth
- Per Capita Consumption
- Imports And Growth
- Import Prices
- Production, In Physical Terms, 2012–2024
- Production, In Value Terms, 2012–2024
- Production, By Country, 2024
- Production, In Physical Terms, By Country, 2012–2024
- Imports, In Physical Terms, 2012–2024
- Imports, In Value Terms, 2012–2024
- Imports, In Physical Terms, By Country, 2024
- Imports, In Physical Terms, By Country, 2012–2024
- Imports, In Value Terms, By Country, 2012–2024
- Import Prices, By Country, 2012–2024
- Exports, In Physical Terms, 2012–2024
- Exports, In Value Terms, 2012–2024
- Exports, In Physical Terms, By Country, 2024
- Exports, In Physical Terms, By Country, 2012–2024
- Exports, In Value Terms, By Country, 2012–2024
- Export Prices, 2012–2024