The exchange rate outlook for the Singapore Dollar (SGD) against the New Taiwan dollar (TWD) is shaped by a convergence of recent economic indicators, monetary policy adjustments, and geopolitical developments.
In recent months, the Monetary Authority of Singapore (MAS) shifted its monetary policy, easing the rate of appreciation of the SGD nominal effective exchange rate band in January and April 2025. This decision was driven by lower-than-expected core inflation and potential economic growth risks posed by U.S. tariffs, especially on key Singaporean exports. As inflation has moderated significantly, reaching a core rate of just 0.6% year-on-year by May 2025, analysts suggest that the SGD could face continued pressure if the MAS maintains its accommodative stance. Such an environment can contribute to increased volatility in the SGD/TWD exchange rate.
Concurrently, the TWD's recent performance also reflects significant pressures from global trade dynamics. Taiwan's export sector has been impacted by U.S. tariffs, particularly affecting competitiveness as new tariffs were introduced in April 2025. Reports indicate that the TWD exhibited volatility, fluctuating beyond 29 per USD before stabilizing around 30 per USD, which raises concerns for the TWD's valuation. The central bank's recent commitment to refrain from exchange rate manipulation could provide some stability, yet the impact of external tariffs continues to loom large.
Currently, the SGD is trading at 24.45 TWD, which marks a 2.2% increase from its three-month average of 23.92 TWD, demonstrating resilience amidst a relatively stable trading range of 4.0%. Market analysts view this level as reflective of both the SGD's strength due to domestic economic conditions and the prevailing challenges facing the TWD.
In conclusion, ongoing monetary policy adjustments in Singapore and the economic pressures facing Taiwan suggest that the SGD could outperform the TWD in the near term, but political factors and global economic uncertainties remain crucial variables. Stakeholders should closely monitor these developments for potential shifts in the exchange rate dynamics between SGD and TWD.
