USD keep depreciating against SGD 🥲

[RedsYWNA]

Lol... USD:SGD I'd consider to be pretty stable for the past 10 or so years.

You should see what it was like in the 1990s and before

Banker told me that when the Fed pivots, USD should drop below 1.30 but I am rather sceptical of his claims.

 

[celtosaxon]

Banker told me that when the Fed pivots, USD should drop below 1.30 but I am rather sceptical of his claims.

The rate hasn’t changed much from when I first moved here in Oct 1996 and it was 1.38. I recall around 20 years ago Sing dollar and Swiss Franc were at parity, and now 1 Swiss Franc buys 1.49 SGD. So, to be honest, SGD is relatively weak… and I would say artificially so. It has more room to strengthen than weaken… the question, will MAS allow it?

 

[stanlawj]

Correct, MAS is semi-fixing (ahem, manipulating) SGD to USD within a range.
Some aspect of mercantilism.

 

[touchring1]

The rate hasn’t changed much from when I first moved here in Oct 1996 and it was 1.38. I recall around 20 years ago Sing dollar and Swiss Franc were at parity, and now 1 Swiss Franc buys 1.49 SGD. So, to be honest, SGD is relatively weak… and I would say artificially so. It has more room to strengthen than weaken… the question, will MAS allow it?

Our bank interest rates of nearly 4% is much higher than Switzerland's 1%, so if this doesn't makes the SGD grow stronger, what else could? I find it strange why people compare Singapore with Switzerland when Singapore is just a city dependent on water and food from Malaysia.

 

[celtosaxon]

Our bank interest rates of nearly 4% is much higher than Switzerland's 1%, so if this doesn't makes the SGD grow stronger, what else could? I find it strange why people compare Singapore with Switzerland when Singapore is just a city dependent on water and food from Malaysia.

I think there are a few reasons Singapore is considered the Switzerland of Asia, aside from being clean and safe, foreigners tend to park their money in Switzerland and Singapore as an offshore haven — SGD and CHF are considered stable/safe currencies to be denominated in, both in their regions and globally. Both countries have the strong regulations, favorable tax code, good governance and are ruled by predictable regimes that don’t stir up trouble with other countries. The key difference is the SGD is managed in a band against a trade weighted basket of currencies, and the exchange rate is the primary policy tool to manage inflation here — both of these policies are very unique to Singapore, but do not seem to deter offshore investors. Higher rates here should draw more capital to these shores, which would normally put SGD on a stronger footing, but MAS is firmly in control of rates and has the means to keep it that way; it isn’t going to change.

 

[touchring1]

good governance and are ruled by predictable regimes that don’t stir up trouble with other countries.

I'll address on the political aspect. Politically, Singapore is really still dependent on votes percentage, this may surprise many foreigners as our laws convey the impression that we are authoritarian. Present belief is that cash rebates to citizens can offset inflation, but I don't think it will work this time round as there is the law of diminishing marginal utility, never mind if the offset is just partial - this is besides the point. Besides, cash rebates also fan inflation.

The demographics in Singapore is very senior, the bulk of people are between the age of 40-70, and older people are very conversative, they dislike inflation, particularly the soaring medical inflation and cost of nursing homes. Even wealthy people with multiple fully paid properties will gripe when the cost of their mee reebus increases by $1.

Price stability is actually very important from the psychological point of view, it's not about the affordability, so no amount of rebates can offset the psychological effects of inflation and the govt has yet to realise it, but they would very soon. So cracking down on inflation or rather the perception of inflation will suddenly become key priority very soon, if it has not already started. Singapore under the current regime is well known for very sharp and drastic policy changes, the 65% stamp duty is a good example. Moving forward, I won't be surprised if there are changes to estate duty laws.

 

[Darwinson]

The rate hasn’t changed much from when I first moved here in Oct 1996 and it was 1.38. I recall around 20 years ago Sing dollar and Swiss Franc were at parity, and now 1 Swiss Franc buys 1.49 SGD. So, to be honest, SGD is relatively weak… and I would say artificially so. It has more room to strengthen than weaken… the question, will MAS allow it?

what bs are you talking. Go google sgd Swiss franc and put max as graph. They were never parity. lowest Swiss franc against sgd was at 2009 at around 1.2.

usd has weakened a lot of the past two decades. When I was a child I saw usd 1.8 and gpb 3.2 like that.


anyway i am
up for sgd reaching parity against usd,aud,cad and nzd. Hopefully it happen. F ck exports.


edit:sorry I was wrong. Such a du mb ssa

 

[highsulphur]

Your US assets converted back to SGD is still higher than where you bought despite the lower usd no?

Just look at total returns in terms of sgd since at the end of the day, that's what matters

 

[bearkia]

what bs are you talking. Go google sgd Swiss franc and put max as graph. They were never parity. lowest Swiss franc against sgd was at 2009 at around 1.2.

CHF and SGD parity happened sometime in 1997

 

[Darwinson]

CHF and SGD parity happened sometime in 1997

https://freecurrencyrates.com/en/exchange-rate-history/CHF-SGD/1997/cbr

wait. But how. 1997 Asian financial crisis. did Singapore just open the reserves did something to protect the currency and economy. can also refresh my memory why Singapore was least scathed?



or did Swiss go through some recession or issue in 1997 to devalue their currency so much ? Wait was it the year euro was introduced and every jumped bandwagon ?

 

[bearkia]

https://freecurrencyrates.com/en/exchange-rate-history/CHF-SGD/1997/cbr

wait. But how. 1997 Asian financial crisis. did Singapore just open the reserves did something to protect the currency and economy. can also refresh my memory why Singapore was least scathed?



or did Swiss go through some recession or issue in 1997 to devalue their currency so much ? Wait was it the year euro was introduced and every jumped bandwagon ?

I am not familiar with Swiss economy, but I think it was not doing that well in 1990s. SGD was appreciating against USD before 1997 crisis, as things go well before crash. I am guessing as two economies were at different phases of cycle that SGD reached parity with CHF.

 

[proton_cannon]

usd cheaper allow you to buy cheaper, what's so sad about it?

 

[celtosaxon]

Swiss Franc and Sing Dollar also hit parity in late 2000, that was the time I was watching it out of concern — the SGD was dropping like a rock… and I was earning SGD.

I felt a little better knowing the Swiss Franc was just as weak. At that time 1 USD could buy 1.75 SGD or 1.75 CHF. I then watched both currencies strengthen considerably over the years… but sadly the Swiss Franc has strengthened so much more.

 

[touchring1]

https://freecurrencyrates.com/en/exchange-rate-history/CHF-SGD/1997/cbr
wait. But how. 1997 Asian financial crisis. did Singapore just open the reserves did something to protect the currency and economy. can also refresh my memory why Singapore was least scathed?

or did Swiss go through some recession or issue in 1997 to devalue their currency so much ? Wait was it the year euro was introduced and every jumped bandwagon ?

We were least unscathed because the export manufacturing and IT sector was strong, engineers were in demand and I remembered IT engineers in their 20s were getting $5k pay per month and this was a lot of money back then as one could buy a 3 bedroom flat from hdb for just over $100k. One could pay off the flat and still have a lot of money left over for the car and kids.

 

[touchring1]

Swiss Franc and Sing Dollar also hit parity in late 2000, that was the time I was watching it out of concern — the SGD was dropping like a rock… and I was earning SGD.

I felt a little better knowing the Swiss Franc was just as weak. At that time 1 USD could buy 1.75 SGD or 1.75 CHF. I then watched both currencies strengthen considerably over the years… but sadly the Swiss Franc has strengthened so much more.

The Sing Dollar appears to be pegged to the dollar in the last 15 years or so, fluctuating between 1.25 to 1.45. Why is this so?

Don't know much about CHF, or the Swiss economy, but Switzerland has a lot of multinationals for a "small country" of only 8million, not much more than the real population of Singapore, but with a land size that is 56 times.

The Swiss economy just like the German economy appears to be heavily dependent on China, Chinese manufacturing (they have many factories in China) and the Chinese market. Due to the unstable political situation, this is a major risk, so I would still bet on the SGD over CHF.

 

[touchring1]

Anyone who bought USD at 1.32 and held in 3 mths fd would have done very well.

 

[reddevil0728]

Anyone who bought USD at 1.32 and held in 3 mths fd would have done very well.

had it gone the other way round the opposite would be true leh.

all these after the fact thing like a bit pointless right

 

[rizhal]

Anyone who bought USD at 1.32 and held in 3 mths fd would have done very well.

Hi-five ! Small amount for me, stock option proceeds.

Happy I did not convert to SGD during the low and I put it DBS 3mth usd FD, almost 4.9% annualized.

can consider converting to sgd now for my use.

 

[chaiscool]

We were least unscathed because the export manufacturing and IT sector was strong, engineers were in demand and I remembered IT engineers in their 20s were getting $5k pay per month and this was a lot of money back then as one could buy a 3 bedroom flat from hdb for just over $100k. One could pay off the flat and still have a lot of money left over for the car and kids.

Now IT still pay $5k, so stagnant haha. 20+ years still pay the same.

 

[touchring1]

Hi-five ! Small amount for me, stock option proceeds.

Happy I did not convert to SGD during the low and I put it DBS 3mth usd FD, almost 4.9% annualized.

can consider converting to sgd now for my use.

Actually, for me, the primary reason isn't even to keep USD, but to park some cash in DBS, but the SGD interest in DBS is just too low.