Singapore dollar nears parity with US dollar amid regional currency surge

[SINGAPORE] The Singapore dollar, along with several other Asian currencies, posted strong gains this week as the U.S. dollar faltered under the weight of economic uncertainty sparked by President Donald Trump’s recent tariff pronouncements.

Year to date, the Singapore dollar (SGD) has appreciated nearly 6% in 2025. Taiwan’s currency has surged by around 8%, while the South Korean won, Malaysian ringgit, and Hong Kong dollar have also recorded notable advances.

Analysts attribute this regional currency strength in part to monetary tightening by Asian central banks. These efforts aim to contain inflation without derailing growth. In Singapore, the Monetary Authority of Singapore (MAS) has pursued a measured yet responsive approach, allowing the SGD to strengthen gradually to cushion against imported inflation while maintaining the country’s export competitiveness. This strategy has drawn praise from financial experts, who see it as a key driver of the currency’s steady ascent.

Looking ahead, some observers predict the SGD could rise even further. According to a Channel News Asia (CNA) report, the SGD currently trades at around 1.29 to the U.S. dollar, but some believe parity could be within reach.

Saktiandi Supaat, head of foreign exchange research at Maybank, told CNA, “There’s a clear diversification trend away from the U.S. dollar, and the Singapore dollar is emerging as a beneficiary.” He highlighted the currency’s perceived safety, noting its growing reputation as a regional safe haven. Maybank now forecasts the SGD could strengthen to 1.265 per USD by the final quarter of 2025.

The weakening of the U.S. dollar has been accelerated by rising geopolitical tensions and an increased shift toward alternative reserve currencies in international trade. Major economies such as China and India have promoted local currency settlements in cross-border transactions, reducing global dependence on the greenback. This trend has further lifted regional currencies like the SGD, as investors seek out more stable alternatives.

Mansoor Mohi-uddin, chief economist at Bank of Singapore, said parity between the USD and SGD could be achievable “within our lifetimes,” citing the example of the Swiss franc, which reached parity with the dollar following the 2008 global financial crisis.

Public response to the possibility of a one-to-one exchange rate has been mixed. Some online commenters expressed skepticism, while others found the scenario plausible.

Economists, however, caution that a stronger SGD, while beneficial for consumers in terms of cheaper imports and overseas travel, could hurt key export-driven sectors. Singapore’s manufacturing and electronics industries—which form a significant part of the economy—may suffer as their products become more expensive abroad. Striking a balance between inflation control and maintaining trade competitiveness will remain a challenge for policymakers.

“As it stands, the SGD has appreciated about 25% against the USD over the past two decades,” noted one Reddit user. “So yeah, 1:1 could very well happen in our lifetime. Stranger things have happened.” However, the same user warned of unintended consequences, quipping: “This is bad news for the 18-year-old who just started investing his National Service paycheck into the S&P 500. He’s banking on 13% returns like clockwork.”

Some commenters worried about the broader economic implications. One noted that Singapore, already perceived as expensive compared to neighboring Southeast Asian nations, could become less attractive to multinational companies if operating costs rise further. “Exports would also become pricier, affecting demand,” the user added.

Another user offered a more nuanced view: “Yes, exports might take a hit, and tourism too, but imports would become cheaper. Travel for Singaporeans could also be more affordable.” Still, concerns linger that if Singapore becomes too costly for global firms, job losses could follow—an outcome policymakers will be keen to avoid.