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CHF/SGD: the SNB against the MAS

The rate between the Swiss franc (CHF) and the Singapore dollar (SGD) brings together two of the most stable currencies in the world, steered by two radically different monetary frameworks : the Swiss National Bank (SNB) and the Monetary Authority of Singapore (MAS).

The SNB runs a classic policy based on its policy interest rate and, if necessary, on foreign-exchange interventions, while benefiting from the safe-haven status of the Swiss franc in times of uncertainty. The MAS, for its part, does not set an interest rate : it directly manages the nominal effective exchange rate of the SGD against a basket of currencies of its trading partners, within a fluctuation band it adjusts according to inflation and growth. An approach suited to a small, very open economy, where foreign trade is worth several times GDP.

The result : the CHF/SGD pair is generally less volatile than other pairs involving the franc, but it reacts to inflation gaps between Switzerland and Singapore, to safe-haven flows and to the health of Asian trade. For a transfer of a certain size — investment, real estate, expatriation or schooling costs — a few basis points on the rate can represent a noticeable difference to the amount received.

Read also: our guides on how to repatriate funds to Singapore and prepare a move to Singapore.

Written by Brice Delhome.