Forecasts for SGD to IDR
Analysts are currently observing heightened volatility in the SGD to IDR exchange rate due to increasing trade tensions, primarily instigated by U.S. tariffs. With U.S. President Donald Trump implementing a 10% tariff on imports from Singapore and a 32% reciprocal tariff on Indonesian goods, market sentiment has shifted negatively. Economists note that these actions are exacerbating fears of a global trade war, leading to a decline in risk appetite among investors. This has significantly impacted emerging Asian currencies, including both the Singapore dollar (SGD) and Indonesian rupiah (IDR).
In recent trading, the SGD to IDR exchange rate has reached 7-day highs near 12,681, which is roughly 0.9% above its 3-month average of 12,571. Analysts highlight that this recent behavior indicates a notable resilience in the SGD, particularly as it has been trading within a stable range of 5.7% from 12,208 to 12,898. The strength of the SGD is further supported by Singapore's strong trade ties with the U.S., which constitute 15% of its total trade, allowing it to avoid more severe tariffs.
On the other hand, the IDR faces pressing challenges, having recently fallen to a historic low against the dollar beyond the critical 17,000 threshold. This depreciation reflects not only the impact of tariffs but also concerns surrounding the new government policies under President Prabowo Subianto, which have raised apprehensions about Indonesia's fiscal stability. Moreover, the Indonesian market has just resumed trading following the Eid al-Fitr holiday, leading to a delayed reaction to these global events.
Currency forecasters emphasize that the interplay of tariffs and policy uncertainty is likely to keep both currencies under pressure. The SGD may demonstrate relative strength due to its managed exchange rate policy by the Monetary Authority of Singapore, while the IDR could continue to experience significant volatility as it reacts to geopolitical tensions and domestic economic concerns. Investors and businesses involved in international transactions should stay alert to shifting market dynamics, as these factors will influence the SGD to IDR exchange rate in the near term.
