The Singapore dollar (SGD) has surged approximately 5.8% in 2025, reaching around 1.29 against the US dollar (USD), and analysts believe the rally isn’t over yet.
According to foreign exchange strategists, a combination of tariff de-escalation, diversification away from the US dollar, and Singapore’s strong economic fundamentals is contributing to the rise. Some even suggest that SGD-USD parity could occur in the coming years.
What’s Behind the Singapore Dollar’s Climb?
Christopher Wong, FX strategist at OCBC, attributes the SGD’s rise to:
- A broad sell-off in the US dollar
- Signs of improving US-China relations
- Stable Singaporean monetary policy
He believes that barring any escalation in global trade tensions, the Singapore dollar could continue its upward trend.
Maybank’s Saktiandi Supaat, head of FX research and also a Member of Parliament, said Singapore is benefiting from a global move to diversify away from the US dollar. With the Monetary Authority of Singapore (MAS) maintaining a steady tightening stance, the SGD is seen as a safe-haven regional currency.
Parity Possible? Analysts Say Yes
The idea of Singapore dollar to US dollar parity—where S$1 equals US$1—may sound far-fetched, but it’s not outside the realm of possibility.
Mansoor Mohi-uddin, chief economist at Bank of Singapore, noted that the Swiss franc achieved parity with the US dollar after the 2008 financial crisis, and Singapore shares similar traits with Switzerland: small, open economies, global financial hubs, and persistent current account surpluses.
“If Singapore continues to attract capital inflows and maintains large surpluses, parity with the USD may eventually happen—even without a crisis,” said Mr Mohi-uddin.
Maybank also projects a stronger SGD through 2025:
- Q3 2025: 1.2800
- Q4 2025: 1.2650
Risks to Watch: Can the Trend Hold?
While parity is possible, analysts caution against overconfidence. Mr Saktiandi highlighted potential economic shocks, geopolitical risks, and the continued dominance of the US dollar as a reserve currency as obstacles.
OCBC’s Mr Wong noted that rising protectionism in the US adds to global uncertainty and could prompt investors to reduce their USD exposure, further weakening the greenback.
Still, most analysts agree that the long-term trend favours the SGD, especially as investors seek currency stability and growth in Asia.
What Does This Mean for Singapore?
For businesses and consumers, a stronger SGD:
- Reduces import costs, especially for energy and goods priced in USD
- Supports overseas spending and travel
- Challenges exporters, who may face reduced price competitiveness
For investors, a stronger local currency may boost SGD-denominated assets, especially if global capital continues to flow into Singapore’s financial markets.
Conclusion: A Currency to Watch
The Singapore dollar’s steady rise is more than just a short-term trend—it reflects the country’s economic resilience, monetary credibility, and global relevance.
While Singapore dollar to US dollar parity is not imminent, it is now considered a realistic possibility by leading economists and strategists.
