Singapore dollar likely to face slight downward pressure against USD by end of 2016

The Singaporean dollar is likely to face slight downward pressure against the U.S. dollar into the end of 2016, reflecting the slow process of tightening of the U.S. monetary policy, noted Scotiabank in a research report. Singapore’s central bank, the Monetary Authority of Singapore, continues to keep an accommodative monetary policy stance, underlining divergent policies between the U.S. and Singapore.

“We expect USD/SGD to close 2016 at 1.38”, added Scotiabank.

The country continues to enjoy the benefits of a “AAA” sovereign credit rating from all major international rating agencies, owing to its solid external position, fiscal surplus and track record of political stability and strong macroeconomic management, according to Scotiabank.

The International Monetary Fund has stated that Singapore’s gross public debt would average 98 percent of its GDP in 2016-2017. The high level of gross debt shows the attempts of government to develop a domestic bond market instead of funding its budget. Singapore, on a net basis, has no public debt, said Scotiabank.