Singapore Dollar Could Match U.S. Dollar in Our Lifetime, Says Bank of Singapore Economist

 By Farhan Ali • June 23, 2025

A major shift may be quietly unfolding in the global currency markets—one that could bring the Singapore dollar (SGD) to 1:1 parity with the U.S. dollar (USD) within a generation. That’s the forecast from Mansoor Mohi-uddin, Chief Economist at the Bank of Singapore, who suggests that long-term financial trends and Singapore’s strategic fiscal management are positioning the city-state’s currency to make historic gains.

Currently, the SGD trades around S$1.35 per US$1. A move to parity would require a significant revaluation—but experts believe it’s not as far-fetched as it sounds.

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What’s Driving the Singapore Dollar’s Strength?

Singapore’s currency has quietly been among the best-performing in Asia over the last decade. Its steady appreciation is supported by:

• Persistent trade surpluses
  Singapore consistently exports more than it imports, especially in high-value sectors like semiconductors, pharmaceuticals, and financial services.
  
• Low inflation
  Unlike many Western economies, Singapore has maintained inflation levels well below global averages through strict policy discipline and non-subsidized energy pricing.
  
• Strong fiscal governance
  The Monetary Authority of Singapore (MAS) uses a unique managed-float exchange rate system, allowing the SGD to rise in tandem with economic strength and global capital inflows.
  

(Source: Monetary Authority of Singapore, 2024 Annual Report)

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The U.S. Dollar’s Decline?

Mohi-uddin notes that if the U.S. dollar continues to weaken due to rising fiscal deficits, political gridlock, and the erosion of dollar-based global systems, space opens for other currencies to rise—especially those tied to stable, transparent economies like Singapore.

“Singapore’s fiscal credibility and consistent monetary stewardship position it uniquely in a world looking for reliability and reserve alternatives,” Mohi-uddin told The Business Times in a recent interview.

(Source: The Business Times, June 2025)

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Asia’s Financial Rise and De-dollarization Trends

The broader backdrop includes a shift in global capital from West to East. Emerging economies in Asia are not only growing faster—they’re becoming more systemically important.

A 2024 IMF working paper outlined how increased investment into Asian sovereign bonds and currency diversification by central banks is gradually reducing reliance on the USD. Singapore, with its AAA credit rating, absence of net debt, and large sovereign reserves, has become an attractive anchor in this shifting paradigm.

(Source: International Monetary Fund, “Currency Reserve Diversification Trends 2024”)

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Not Just a Currency—A Financial Signal

The idea of SGD-USD parity is not just a matter of exchange rate mechanics. It signals a deeper recognition of Singapore’s role in shaping the future of finance.

Analysts from JPMorgan and DBS have separately noted that the Singapore dollar has become a proxy for regional risk and monetary stability. In particular, its lack of capital controls and deep FX liquidity make it one of Asia’s most tradable currencies.

(Source: JPMorgan Asia Currency Outlook Q2 2025 • DBS Macro Research Note, May 2025)

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Challenges Ahead

Experts caution that while parity is theoretically possible, it would depend on multiple structural shifts:

• Continued economic divergence between the U.S. and Singapore
  
• Global acceptance of SGD as a trading or reserve currency
  
• A prolonged weakening trend in the USD
  

Still, the scenario is gaining traction—not just in academic circles, but among global investors recalibrating for a multipolar currency world.

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Final Thoughts

Whether or not SGD ever hits a literal 1:1 exchange rate with the USD, the conversation signals something larger: Singapore is no longer just a stable outpost in Southeast Asia. It’s becoming a central node in the architecture of global finance.

As the dollar faces intensifying scrutiny, and Asian currencies gain credibility, the Singapore dollar’s rise may not only reshape forex markets—it could redefine the meaning of monetary trust in the 21st century.

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Sources:

• Monetary Authority of Singapore, Annual Report 2024
  
• The Business Times (Singapore), “SGD Could Hit Parity in Our Lifetime,” June 2025
  
• IMF Currency Reserve Diversification Report, April 2024
  
• JPMorgan Asia Currency Outlook, Q2 2025
  
• DBS Macro Research, May 2025
  
• Bank of Singapore Economic Commentary, June 2025