Convert US dollars
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USD/SGD: the Fed versus the MAS

The rate between the US dollar (USD) and the Singapore dollar (SGD) reflects the meeting of two very different monetary approaches : that of the Fed (US Federal Reserve) and that of the MAS (Monetary Authority of Singapore).

In the United States, the Fed steers its policy through interest rates. When it raises its rates to contain inflation, the US dollar tends to appreciate against most currencies, including the SGD. The USD is also the world's main reserve currency : in times of tension, investors take refuge in it, which strengthens the greenback.

In Singapore, the MAS made an unusual choice : rather than setting a policy rate, it conducts its policy through the exchange rate. The Singapore dollar floats within a band against a weighted basket of its trading partners' currencies (the S$NEER), which the MAS adjusts to control imported inflation. As a result, the USD/SGD stays less volatile than many other pairs and moves within a relatively contained range, paced by the Fed's decisions and the MAS's half-yearly revisions.

On the same topic, discover how to repatriate funds to Singapore and prepare a move to Singapore.

Written by Brice Delhome.