SGD/INR Outlook:
Slightly positive, but likely to move sideways, as the rate is above its recent average without a clear driver.
Key drivers:
• Rate gap: The Monetary Authority of Singapore's recent accommodative stance contrasts with India’s persistent current account deficit, affecting the INR's outlook.
• Risk/commodities: The current low oil prices may benefit Singapore's economy, but India’s heavy reliance on crude imports continues to pressure the INR.
• One macro factor: The U.S. tariffs imposed on Singaporean goods could weigh on the SGD, impacting its trade dynamics.
Range:
The SGD/INR is likely to hold within its recent range as market influences balance out.
What could change it:
• Upside risk: A significant boost in economic performance from Singapore could strengthen the SGD.
• Downside risk: Increased FPI outflows from India could further weaken the INR against the SGD.
