The Indian Rupee (INR) continues to face downward pressure against the Singapore dollar (SGD), with the latest exchange rate at 0.014302, which is 1.8% below its three-month average of 0.014557. Analysts attribute this depreciation primarily to a series of interconnected factors. The US Federal Reserve's ongoing interest rate hikes have resulted in significant capital outflows from India, further weakening the INR. As discussed by various economists, the heightened demand for US dollars exacerbates India's widening trade deficit, fueled by rising imports and sluggish export performance.
Recent geopolitical tensions and deteriorating trade relations between the US and India have compounded these issues. The imposition of hefty tariffs on Indian exports by the US has diminished investor confidence, contributing to the rupee’s decline. Furthermore, an extraordinary surge in gold imports, noted at a 200% increase in October 2025, has intensified pressure on India's current account deficit, leading to additional strains on the INR.
In contrast, the Singapore Dollar has shown a more stable outlook, although it is not completely immune to external pressures. Monetary policy adjustments by the Monetary Authority of Singapore (MAS) aimed at mitigating economic risks have maintained a balanced approach towards SGD appreciation. Despite lower core inflation figures leading to a reduction in the rate of appreciation of the SGD nominal effective exchange rate (S$NEER), the impact of US tariffs on key Singaporean exports has weighed on the currency.
Political stability following Singapore’s May 2025 general elections has fortified investor confidence, which is critical in a time of global trade uncertainties. Nevertheless, the broader economic climate remains fragile, with experts watching how ongoing global issues will ultimately affect both currencies.
As it stands, the INR's recent performance within a stable 4.4% range from 0.014176 to 0.014793 indicates a period of volatility ahead. Forecasters suggest that continued monitoring of trade balances, geopolitical developments, and monetary policy adjustments in both India and Singapore will be essential for those engaged in international transactions between these currencies.
