US$1 to S$1 could happen in our lifetime, says chief economist at Bank of Singapore

The U.S. dollar could continue to weaken against the Singapore dollar in the coming month, CNA reported economists and forex researchers predicting how much further the greenback could slide.

Singapore dollar has been strengthening

This was after the Singapore dollar strengthened about 5.8 per cent against the U.S. dollar so far in the first five months of 2025.

The Singapore dollar is currently at 1.29 against the U.S. dollar.

In 2024, the Singapore dollar hit a 10-year high at around 1.28.

Maybank expects the currency pair to be at 1.28 in the third quarter of the year and 1.265 in the fourth quarter of the year, CNA reported.

Achieve parity US$1 to S$1

Mansoor Mohi-uddin, chief economist at Bank of Singapore, went as far as to predict that parity between the two currencies could be possible in our lifetimes, which means that US$1 could be worth S$1.

Bank of Singapore is the private banking arm and a wholly owned subsidiary of Oversea-Chinese Banking Corporation (OCBC), Southeast Asia’s second largest bank.

Mansoor had noted in a May 5 note that the Swiss franc hit parity with the U.S. dollar after the 2008 financial crisis.

Both the Swiss currency and the Singapore dollar have risen over decades against the greenback, it was also noted.

Mansoor added that both Switzerland and Singapore are large financial centres with small and open economies.

This enables them to attract major capital flows that cause their currencies to appreciate.

He also predicted that parity could be more likely achieved during a non-crisis than a crisis.

This can occur if Singapore continues to attract very large capital inflows and run very large current account surpluses; the Singapore dollar will continue to rise against the U.S. dollar.

Why is US dollar weakening?

The U.S. dollar has been weaker due to tariffs and expected weaker economic growth.

Singapore’s stability and strong fundamentals make its currency a more attractive option as an alternative to the U.S. dollar, a forex researcher at Maybank said.

An OCBC forex researcher also said expectations of a weaker U.S. dollar in the near future are based on the tariff situation not worsening and its impact being manageable, compounded by the U.S. Federal Reserve still easing interest rates.

So far, the diversification away from the U.S. dollar to currencies that are more stable will continue to play out.

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