Singapore poised to overtake Hong Kong, India with Asia’s best performing currency
- While the Hong Kong dollar has been Asia’s top performer so far this year, the city’s currency is vulnerable to a sharp reversal
However, it’s catching up with those peers due to speculation sticky price pressures will prompt the Monetary Authority of Singapore, the central bank, to maintain its appreciating exchange rate settings in its policy review due on Friday.
“We expect SGD to continue its outperformance in the second half as we don’t expect MAS to aggressively reduce the slope of the S$NEER policy band this year,” said Alex Loo, macro strategist at TD Securities.
“SGD should continue to benefit from the appreciation path of the policy band, while the pickup in growth momentum and upswing in global trade should bolster SGD’s appeal to investors.”
The central bank, which uses the exchange rate as its main monetary policy tool, has let the Singapore dollar appreciate against the currencies of the island’s major trading partners this year to tackle inflation.
