SGD INR crosses 48!

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The SGD strengthened to 1.4150 against USD overnight and that has pushed SGD INR to 48.02 mark. I am expecting INR to strengthen when the Indian markets open around 11:30 am Singapore time.

If you are looking to transfer money today then the next 2 hours is a good time using DBS Remit. The offered rate is 47.57 and is expected to fall down once the Indian markets open.

Disclaimer: These are my views and not investment/financial advice. I bear no responsibility for any decisions made by readers.

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31 thoughts on “SGD INR crosses 48!”

  1. Hi Aditya
    I follow your blog regularly and hence visited after today’s rates went up to 49.50 on xe.com.
    I’m planning on a NRE FD for 5 years @8% p.a. I figured that gives me upto Rs.72 bandwidth in 5years if INR does slide to that, to stay in No loss situation on repatriation.
    Do you think it’s worthwhile plan.?

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    1. Hi

      Yes, investing in NRE Fd is a good bet now. The interest rates in India are bound to go down over the next 2 years and locking in rates at a rate 49 and more is a sound plan.

      Cheers

      Like

    1. Hi Ashish,

      Apologies for the late reply. I was on vacation. Taking a view on SGD for 3 years in these volatile times is extremely difficult. What I can suggest is taking a loan based on your prospective earning currency because that is what you are going to use to pay back this loan.

      The rates in Singapore are quite attractive but I don’t know what kind of terms do they have for education loan. India definetely would be more expensive from a interest outlay perspective but if you see your self working outside of India then the rupee weakness could work in your favor.

      Broadly I expect Indian Rupee to be less volatile than Singapore Dollar as SGD exchange rate are used to administer the monetary policy. However Indian rupee should depreciate towards 70 once the Indian state election results are out.

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    2. thanks for the reply. I am hoping to get job in SG post MBA. Interest rates in SG are approx half as compared to india. My concern is if the SGD goes to 55 in next couple of years than I will be paying more and if it remains around 46-49 levels than I will save a lot

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    3. I think sgd loan might be cheaper than INR irrespective…what are the interest rates you are being offered?

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    4. Loan in India would be around 9-10% if I am not wrong which would mean that over a period of 3 years the exchange rate would have to go below 43 for you to benefit from taking a loan in India.

      As I said that predicting what the rate would be in 3 years is near impossible given the volatile market conditions probability of SGD INR going below 43 is low and SGD loan would be beneficial as it helps you pay off loan in the currency in which you have expected future earnings.

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  2. Hi Aditya,

    After Budget, i see rupee appreciation w.r.t sgd. What you think. Is it right time to transfer or should have wait n see attitude.

    Regards,
    Santosh

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    1. Hi Santosh,
      Transfer or not to transfer depends on where is your money invested in Singapore and where would you invest it in India.
      Short term Rupee will get strength but given the zero chance of gst bill being passed it should fall again.
      If you were following the comments I had suggested to everyone to transfer once the rate crossed 48.5.
      Month of March should see a flurry of Tax free infrastructure bonds being issued and if you plan to invest in them transfer now.
      Thanks

      Like

    1. Hi Santosh,

      50 would really depend on the budget and if the GST bills and some other reform bills get passed. The markets are going to be volatile next few days and there is a likelihood that sgd INR crosses 49 in intra day trade. The trend should start appearing with the railway budget.
      Thanks

      Like

    1. Hi Naveen,

      The transfer Rate as I write is 48.45 on DBS (market rate = 48.85), 49 is just 15 cents away and I would not be too hung up about a certain level if you have really a need to transfer money this week.
      Cheers

      Like

  3. @Aditya will it ever touch the 53 mark again (or even cross 50) as in 2013 august? what are the factors that caused the SGD to go that higher in 2013 aug/sept?

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    1. I do believe 50 against sgd is a fair value for INR, Will it happen or not that’s difficult to say. In Aug 2013 the Rupee had fallen dramatically to 69 against USD and SGD was around 1.30. So for sgd INR to move to 53, sgd has to strengthen a lot more and Rupee to fall some more. With the risk off mode in the market and sgd being a almost safe haven currency sgd could strengthen more from here.

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  4. Hi Aditya,
    As per today the 1 SGD is 48.49 in DBS. I am planning to transfer 20K, Should I wait to cross 49 or should I transfer now? Pls suggest.

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    1. Hi Naveen,
      I would say transfer half and wait for a few days to see if rate improves. That’s what I am doing :).
      Thanks

      Like

  5. Hi Aditya, I have some bulk amount to transfer. Around 40k SGD. I was waiting for more than year for good rate. Is it the right time to transfer or can i expect it will reach beyond 48 before budget or after.
    Please suggest. Thanks.

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    1. Hi Santosh,

      It’s already crossed 48 so I think it’s a good rate to convert and put into interest bearing securities. The rate might improve to 49 in coming weeks but it’s difficult to catch top and bottom of the market so transfer some now and wait for 2 weeks and transfer rest later if you feel like.

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  6. It’s interesting to note that most currencies have gone up significantly against the dollar, but INR has not gone up so much. It looks like RBI is now buying back the dollars that it had sold in Jan. In Jan RBI was preventing INR from falling and now its probably preventing it from rising so that exports become competitive. Brilliant strategy by Rajan.

    For the time being we should see SGDINR in the 48-49 range. Apr monetary policy by MAS will be interesting. There is a report that MAS will ease so that should put a lid on SGD rising too much against INR.

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  7. Hi Aditya,

    I have taken a Citibank personal loan in Singapore (1.5 % proc fee). Is it wise to transfer the amount to India in an NRE account and then retransfer at the end of 6 months when I have to repay it. Also, does it involve lots of formalities to get it back to Singapore.

    Thanks,

    Best Regards,
    Amay

    Like

    1. Hi Amay,
      1.5% processing fee equates to roughly 3.2% per annum interest rate. On transferring the banks take away 1% in fee or rate spread both ways so taking a loan and transferring in and back costs roughly 5.2%. The FD will give you around 7.5% so you stand to gain roughly 2.3% per annum. If the exchange rate stays where it is. I think that taking loan and transferring from exploiting the rate difference is not very attractive with a 3% loan rate, few years back when the differential was around 5-6% the strategy was exciting. However I personally like the idea of buying long term tax free bonds in India – the likes of NHAI and HUDCO as I expect the interest rates in India to fall over time.

      Like

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