SGD INR flirts with 52, could it hit 55?

After a long hiatus I finally got some time to make a post, thanks to the followers for the prompt and encouragement.

SGD INR has been on a roll in the past 8 months and to be honest this move was long overdue. The Indian Rupee was grossly overvalued and just needed a trigger to correct. This time around the triage of rising oil prices, increasing fed rates & falling emerging market currencies led by Turkey and political environment turning less favourable for the ruling BJP led by Prime Minister Modi finally precipitated the Rupee.

Rupee was 47.5 against the SGD and 63.65 against the USD on 1st Jan this year. Since the start of the year the Rupee has fallen 11.5% against the USD and 9% against the Singapore dollar and traded at 71 against the USD and 51.75 against the SGD yesterday. Looking at Year to Date (YTD) values one might think that the move is extreme and Indian economy must have worsened dramatically during the year but the fact is that the currencies were slowly adjusting to the dollars rise over the past 2 years and rupee was irrationally holding its ground. I have often mentioned in my previous posts that strength of currency and national pride should not be linked and currency should follow economic fundamentals and why such a simple concept evaded the current Indian government is beyond my comprehension.

Delving a little deeper and looking at the currency movement from an academic angle and using the Interest rate parity, the Fed rates have moved up from 25 basis points to 200 basis points over the past 2 years. India increased its rates recently from 6% to 6.25%. The interest rate differential which used to be around 6% has now come down to 4%. One might say that should have resulted the rupee falling by only 2% (6% – 4%) but why the big fall?

The answer is that rupee was fundamentally over valued. At the start of the year the REER (Real Effective Exchange Rate) index stood at 118 which simply means that the currency was 18% overvalued against a basket of currencies. The index currently is around the 110 mark. Which indicates that even after the correction the rupee remains overvalued. Now does that mean that rupee could fall another 10% against the US dollar? The answer is, theoretically yes! but will it happen in real, I don’t think so.

How does the rest of the year look like against USD?

The Fed is on a war path to increase interest rates and I expect at-least 2 more hikes over next 9 months before they take a breather. Oil prices have stuck around the US$75 mark and the expectation is for the oil demand to boost prices to US$80 to 85 a barrel range. The shock would have been severe had the world not been investing in alternative sources of energy. The US economy has been doing exceptionally well and the unemployment is at an all time low, EU has also started to improve with lower unemployment. After effects of BREXIT are still a concern and the ongoing trade war between US and the rest of the world doesn’t look to stop any time soon.

I think that the USD INR has a little more room to drop and will stabilise around the 72-74 range, another 2 to 4% decline from current levels. RBI has been smart to not defend the rupee unnecessarily and burn through the reserves learning from the actions of  the other central banks and is in the market to just smoothen the rupee’s fall. However,  better than expected GDP figures published on 1 Sep should lend temporary support to the rupee.

What does it mean for SGD INR?

Singapore dollar has been less impacted by the strengthening USD and MAS has allowed the currency to strengthen to neutralise the increasing US interest rates. USD SGD has hovered around the 1.35-1.37 mark.

If the fundamentals in the market deteriorate dramatically, USD SGD could touch 1.40, however if the oil prices increase and the inflation, specially housing prices don’t cool down the currency could strengthen to 1.30.

The SGD INR range that I see for the rest of the year would be between 50 to 54, with a bias to stabilise around the 52.5 mark.

India has elections due next year and this currency weakness would be welcome by the ruling party, which has a large support amongst the overseas Indian community to have foreign donations resulting in bigger rupee conversions. This is not very different to what happened in 2014 when the rupee had depreciated to 53 against the SGD in Aug of 2013 and then slowly recovered as elections approached in 2014. I am pretty confident that the trend will be repeated this time around.

Finally, coming to the crucial question of will rupee touch 55? I don’t think so.

Should you convert now and remit to India or wait? this is dependant on individual circumstances though I personally like to keep funds invested in Singapore.

168 thoughts on “SGD INR flirts with 52, could it hit 55?”

  1. Hi Aditya – As usual what is your expert opinion on current situation with exchange rates, are we moving toward > 55 or it is momentarily?
    Thank you πŸ™‚

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    1. Hi Deep

      I had mentioned we will cross 55 in this week around 2 weeks back :). I think the new base is 54.5 – 56. If it touches 56 or is near that in 1-2 weeks then good time to transfer to India

      Like

  2. Aditya, bloomberg exclusive news that Kotak is looking at buying out IndusInd bank! Looks like another good call from you about IndusInd bank FDs.:) I think the 7% wont last and should be locked in

    Like

    1. Yes, I read that as well. It makes sense to lock in rates with Indus Ind. How was your experience of opening an fd with them. How long did it take

      Like

    2. I applied for NRE savings account online on Friday late evening, by filling the forms online and uploading scanned documents. On saturday afternoon I received email that my application is good and that I receive a call to complete their review process and they will ask me some questions. So expecting the call today. I was able select my account number and also internet login during the application process. But it is yet to be activated.

      Like

    3. And now there is a strong denial by Indus Ind (which was expected :)) but overall the news is good for IndusInd. In any case we should try and spread the NRE deposits across banks.

      Liked by 1 person

  3. Hi Aditya – Just to understand/ inform you that I see that in your blog live rates showing “DBS Remit β‚Ή53.90” but in actual it at DBS site exchange rate: 1 SGD 53.642313 INR for >50k.
    Thanks

    Like

    1. Also intend to use TransferWise the first time, hope you had good experience with it πŸ™‚ . I find it slightly confusing when they ask how would you pay commission!
      Page displayed Payee name “TransferWise Singapore PTE” and a Reference code. Now I am unsure should I send them remittance money+commission together ? DBS is not allowing me the add the such a long payee name. Do we know how to transfer from DBS to TransferWise? Thanks.

      Like

    2. Name is not validated when you are making a local bank transfer. What matters is that you key in the correct account number and the correct bank details. So if the name gets truncated it is okay.

      Like

    3. Thank you. I need to refresh the website. It’s vintage looking. Just the work craziness leaves no time

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    4. Deep, Transferwise has a wallet app, just like Yourtrip and Revolut. You can download the app and apply for an account and then it will be very easy to top it up via bank transfer and remit to India. They send you a debit card as well. Transferwise has fees when you topup using credit card, so dont do that.

      Like

    5. Thank you. To test, I managed to transfer $1000 via QRCode scan as couldn’t add their account to DBS missing Bank Code.
      It was stating 20 mins will take to remit but after the transfer it say 3 days. May be because it is my first transfer.

      Like

    6. Hi Deep, I just tried a test transfer via transferwise. It is very straightforward. They give me their bank details. Basically you need to go to your online banking and add transferwise as recipient.
      Their bank is DBS. You can just just choose DBS bank their main marina bay branch. There cannot be goofup in this. In case of a local transfer, the bank account number is unique across branches.
      Then they gave their account number and the reference code. These 2 are important things. You add the account number and confirm the payee. Then do a transfer to the payee and remember to enter the reference code.

      I have done this tonnes of times, while doing transfer of money to online stock brokers in Singapore. There is nothing to goof up, just make sure you enter the account number correctly. Even if the reference code is wrong, they will be able to track your payment when you contact them.

      Hope this helps,
      Cheers!

      Like

    7. Thanks Nitin. All sorted. Waiting for the remittance to complete. Their rates are very good as compared to DBS. DBS remits in few hours.

      Liked by 1 person

    8. Hi Aditya, Nitin, Remittance through DBS directly from one’s own DBS bank account I think attracts less scrutiny as compared to TransferWise. There would be a high chance that authority would reach about asking many questions on source of funds etc. Even though it’s not difficult to prove, one would like to avoid such inquiries just because one gets a slightly better rate.

      Why I think so is because of the fact:
      1.) when we are using TransferWise money would actually be getting first transferred to their account i.e. no more one’s money πŸ™‚ . And then they transfer it to a designated India account. So in this process money moved through multiple channels and could potentially be scrutinized from the money laundering aspect.

      2.) They don’t actually transfer SGD to India instead they pay from their local account in India. Which again potentially be scrutinized from the money laundering aspect.
      I think using TransferWise for small sums over a couple of months is ok, but not for large sums.Β 

      I am notΒ taking this as an illegal/ risky platform but one should always be ready to face greater scrutiny and disturbance from authority.

      Your views please if I am terribly missing something!

      Thanks, Deep

      Like

    9. Hi Deep,

      You could not be more wrong. Transferwise is regulated by MAS and works exactly like DBS remit does.

      Using DBS remit you transfer money to DBS Singapore which in turn has a Nostro account with DBS India and money gets reported to RBI. Dbs Singapore and dbs india are 2 different legal entities.

      Transferwise being a transfer agent has an account with a bank in Singapore and also a Bank account in India with a different bank and the process is exactly the same.

      For your first transfer they will have additional AML checks. For subsequent transfers things will be quicker. I have had money transfered in less than 1 hour using transferwise which in some cases can be quicker than DBS.

      No bank actually transfers SGD to India. SGD is not of any use in India. All that happens are entries in Nostro and Vostro accounts of correspondent and intermediary banks.

      Liked by 1 person

    10. Hi Nitin – Missed your message earlier. I sent 1k to get full understanding of TransferWise and the rates received:
      Before Commission : 54.26
      After Commission : 53.94

      Like

    11. Hi Deep, I agree with Aditya, I did some remittance using SCB remittance in June when they were giving spot rate. I noticed the transaction description on my Indian account statement says Istarem, and it is an NEFT transfer and doesnt say who was the original transferer. On the other hand I did remittance using Big Pay and the description has my name in the account statement.

      So, I think it wont make a difference whether you use a remittance service or a bank.

      Like

    12. Hi Aditya – I do agree as well on how money gets paid in destination country and no doubt about the legal status of these channels. The highlight is about the difference in the way money changes hands at the source location and potential additional scrutiny. Thanks

      Like

    13. If you are asking about the question “source of funds” then that is a Reserve Bank of India requirement. Even DBS will have to furnish it.

      Like

    14. Hi Deep,

      Have fixed the rates problem and added a new page with live comparison for major service providers. Now you can safely bookmark this page and refresh to check rates regularly πŸ™‚

      Like

  4. Hi Aditya,
    What is your view about Yes bank FDs now? The bank seems to have stabilized and they have returned the RBI standing facility of 50k crores. Their deposits numbers have grown 30% in the last qtr. Seems safe to me to put money in their FDs @7%. Your thoughts?

    Thanks in advance!

    Like

    1. Hi,
      I prefer IndusInd with the same rate. Not sure what else may happen with Yes bank. Somehow I have never liked them – you know that well :).
      Cheers

      Liked by 1 person

    2. Thanks. I just applied online for IndusInd NRE account. I uploaded the scanned documents. I hope the account gets processed easily. Did you also open NRE FD with them?

      Like

  5. Hello guys,

    There is a jugaad right now, if you want to save money on India transfers. You need to be a bit savvy and do some leg work.
    1)Amex true cashback credit card gives you cashback of 1.5%. But if you are a new customer, for the 1st 5 months and upto $5000, you get a cashback of 3%.
    2)If you guys have Grab app, you will know, they also have mastercard. Normally topping up of Grab using mastercard, doesnt give any cashback or miles. But Amex True cashback card offers cashback(1.5% or 3%) when you top up grab. This is true as per latest update:
    http://amex.co/SGexclusions
    3)There is a new wallet app called BigPay. Its quite popular in malaysia, but recently launched in SG too. Normally grab doesnt allow any prepaid wallet topups. So you cannot topup revolut using grab master card, for example. However, currently BigPay top up via grab works. Tested myself.
    4)BigPay allows remitting to multiple countries including India and exchange rate is very similar to SingX. Currently I notice the rate is 54, which spot rate is 54.36.

    So, this way, you are offsetting the remittance fee/spread of 0.35-05%, via cashback from Amex which can be 1.5-3%.

    Note, BigPay has a daily limit of $5000 and Monthly limit of $10000 for transfers. So this is good for small regular transfers rather than bulk sending money to India.

    So, this is my desi jugaad. If anyone wants to try and you and want to apply for BigPay wallet app, you can use my referral code LAEFTVAR9K. We both get $5 each. Aditya, I hope it is okay to share my referral code, in case it is against policy, its is okay, you can delete it. No offense. πŸ™‚

    Cheers!

    Like

    1. Just to update. I did my 1st transaction via BigPay less than 1hr ago and I got the rate of 54.02 and the amount is already in my Icici bank account πŸ™‚

      In my case, I already had amex truecash back card and grabpay mastercard, then I applied for BigPay, just to try out. It is actually not much of work, once you have everything πŸ™‚

      Like

  6. Now SCB India has also cut NRE FD rates for tenor > 1yr to 5.5%. I booked some NRE FDs for 3 yrs with them @ 6.2%, just in the nick of time.

    They still offer for 1yr duration 6.2%, which is better than liquid or bond funds of same duration. But for longer duration, now, it is better to use AAA corporate bond funds like Bharat Bond or GILT funds, even though there will be taxation, it will be better than locking into currently low FD rates.

    Like

    1. I think this is a good time to invest in govt PSU Mutual Funds. My view is that these PSU will have to pay dividends to make up for revenue shortfall and a lot of them are sitting on large cash reserves.
      Also Vietnam remains my preferred place to invest. They have done great with containing the pandemic and are one of the few economies that will grow this year. Ofcourse a balanced portfolio is a must πŸ™‚

      Liked by 1 person

    2. Either that or cpse ETF. They have both not done well recently. Or if you are allowed to buy individual stocks then select ones with low pe high dividend yield

      Like

  7. Hi Aditya, Is it a good idea to transfer 100k+ funds now to INR as rate are at 53.30, or do we any more benefit in holding. Thanks

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    1. Hi Deep, Isint Sgd INR at 54 today? My target is to remit everytime it crosses 54.5 and have been using IDFC bank account that gives 7% interest rate without any lock in.

      There is a chance that SGD strengthens to 1.30 which would take sgd inr to 56. So depending upon what you want to do with the money after transferring to India take a call

      Like

    2. It’s as risky as any other bank. Ofcourse I would not put all the money there. I think IDFC is ok for one year and if there is any negative news can immediately transfer they have 7% on nre savings

      Like

    3. In the current environment 7% is very high. So if they are paying so high they must be taking huge risk. There are limits to internet banking transfer of 10L per day. So if you keep like 1cr, it will take you 10 days just to transfer money out.

      Like

    4. Actually it’s cheaper capital than going in the market. Hdfc banks cost of borrowing in the external market is around 5.5% which is close to what govt can borrow at. 10y gsec yield is around 6% with offering depositors 7% on savings bank is getting cheaper capital than going to market – bond or preferrential shares. Yes, it’s not sustainable to have this spread for over 2 years but in short run not bad. I just keep a close watch and am ready to remove money at the slightest bad news. Idfc has govt stake unlike Yes and its not a co-operative bank so risk of a wipe out is low. Even for Yes it was the exotic products holders who got wiped out not the common depositor

      Liked by 1 person

    5. Hi Aditya, Thanks.. I checked DBS today’s rate which was at 53.30 in afternoon .. now slightly higher at 53.57.

      Like

    6. Interestingly IDFC Saving account rates are 7% but FD rates much lower. Which makes sense in current situation as they can reduce at anytime. So though rates are high still they are mitigating some risk. Hope I am correct on this understanding πŸ™‚ Thanks.

      Like

    7. I just noticed Standard chartered bank India offers 6.3% interest on NRE FD for 1yr. This is a reputed bank and seem much safer.

      Like

    8. Just compared a few transfer services, Istarem, SingX and Transferwise all are very similar give you around 53.66. Sadly SCB gives only 53.6. SCB used to give spot rate few months back.

      Like

    9. Hi Nitin – I have no idea what I am going to do with the cash, so only FD as of now. πŸ™‚ Thanks.

      Like

    10. Just contacted SCB bank in India, account opening seems quite straight forward, just send them scanned copies and account gets opened in 2 days.

      Like

  8. Hello guys,

    How are you all doing? It is interesting. INR looks very strong with so much flows coming from FDI for Reliance Jio and retail divestment. Sensex has been roaring with the FII flows, while STI has been languishing at the bottom, who would have thought, this would happen at the peak of Covid in March. Anyways, even though the Indian economy has been badly managed, investors are very optimistic about India, while it is opposite for Singapore right now. Well managed Covid situation, but Singapore depends on trade with the world and Singapore stocks are all old economy.

    What happens next? I think it is better to be globally diversified, rather than keeping money in SGD or INR.

    Cheers.

    Like

    1. Yes, being diversified is good. Though with the recent run up and upcoming year end and US elections I am inclined to stay in cash. I expect volatile markets.

      Like

  9. Hi Aditya

    Please post your views and analysis on SGD to INR exchange rate until the year end -2020 if you get some time . Please also advise NRE deposits or any better investment options in India. Thanks a lot.

    Like

    1. Hello

      That is on a long list of things to do, hopefully I have some time to write over this coming long weekend.

      Thanks

      Like

    2. Hi Mesudhareddy,

      I would say the 54.5 – 55 levels are good levels to remit to India. There is a chance that over the next 6 months the rate might touch 57 so doing monthly transfer to average out the rate will be a good idea.

      Like

  10. The rupee ends as the best performing currency in Asia after its best single-day gain in three months. πŸ™‚

    Looks like the RBI was all this while preventing Rupee appreciation but now that the Quarter is over and they have transferred the profits to govt, they have let it go

    Like

    1. Hi Venkat, NRI FD rates have fallen to 5% now. Bharat bond 10yr has a yield to maturity of 6.5% currently. Short term capital gains is taxed as per income tax slab. Since I have no India income, I can sell just enough Bharat Bond every year, such that the income is below 5L, after the 80c deduction. So it is easy to generate tax free income for around 50-70L worth Bharat Bond every year.

      Like

    1. I have raised another 50K SGD cash, by selling STI ETF. I will transfer this to India in the next few days, would love to see SGDINR hit 54.5. I still have 200k SGD stuck in STI ETF, I guess I will have to keep it for long term to recover, the average price was STI 3200.

      Like

    2. We should see 55 soon. I like how you can openly talk about loss making investments. Not many people have the courage to openly admit losses.

      Liked by 1 person

    3. 54.80 right now. I think this is not normal. RBI is preventing INR from appreciating against USD, there are various theories and controversies behind it, like they want to transfer profit to govt etc. But the impact is that people like us who hold non USD currencies can make use of this opportunity and convert to INR at these unreasonable prices. USDINR should actually be in the 60s, considering that India is now not importing much oil and demand for dollars is very low in India now.

      Like

    4. Actually, the rupee is grossly overvalued. It should be 80 against the dollar, if not for RBI intervention. The Indian exports are grossly uncompetitive in dollar terms. It’s not that India has switched to renewable completely. The oil consumption is low because the economic activity has reduced. The only positive is tons of investment money that Reliance Jio is bringing in and that cushions the fall. I shall wait for rupee to cross 55 against the SGD

      Liked by 1 person

    5. I am done with my conversion of my existing SGD funds. If SGDINR appreciates, it is good for my future SGD savings. Cheers guys.

      Like

  11. After holding a lot of SGD here for a long time, I am now giving up. I think I am better off investing in Indian fixed income, like bond funds. It is difficult to generate returns from Singapore, if it is safe there are hardly any returns. If you take risk, we get hit with a crash. So keeping money here for last 2-3 years has been a loss for me. I am now moving 100k-200k to India atleast rate is 54 now and I will lock in into long term Indian bond funds like Bharat Bond 2030.

    Like

    1. 55 will come on back of SGD strength. As SGD moves to 1.38 against USD we will hit 55. Have been wanting to make a post but this WFH has resulted in more work

      Liked by 1 person

    1. Hi Reddy,

      SGD INR trajectory will depend on how the COVID-19 situation unfolds in India and Singapore. Let’s pray that the infections subside quickly and countries start opening up.

      As with Indian stock markets, there might be some value buys ( I don’t track them) but the market could fall another 20% from here. I think the BSE sensex could go near 22k mark.

      Like

  12. Hi Aditya,
    SGD.INR has hit 53.6 today. Any advise on the forecast? Is it good time to lock-in good rates?
    I have a about 50k SGD as war chest. Any recommendation on investing those for short term 1-2 yrs (either in India or in SG) at this volatile period?
    Thanks in advance

    Like

    1. Hi Anuj,
      It’s a good time to start transferring to India and invest in NRE FD. Just be careful while picking up the bank and put your money in more than one NRE account.
      SGD INR could touch 55 so transferring say 5-10k every 50p rise would be a good strategy
      Cheers

      Like

  13. Thanks a lot Nitin for your reply. Also, is it possible to hold Singapore Bank Account even if I am not working here.

    Regards
    Arin

    Like

  14. Hi Aditya,

    I am planning to move from Singapore to Australia. In between planning to stay in India for few months and during that time my NRE account will be converted to normal savings account. So, my query is when I go to Australia will my savings account be converted to NRE account or it will be NRO account ? And will it be taxed for outward remittance to Australia ? Can you please advise.

    Regards
    Arin

    Like

    1. If it is for a few months, there is no need to convert. The rule doesn’t have any timeline for conversion. It says, when you decide to become resident, that is when you have to convert. But in your case, since you are moving to Australia, you are not going to become resident, so no need to convert.

      Congratulations btw πŸ™‚

      Like

    2. Technically one should look at residency status based on number of days spend outside India every year. But generally if you are going to be away from India for more than 182 days in a previous year then no impact and your status will remain NRI. The nex tax law that was tabled in Parliament on 1 Feb is still open to interpretation so if you want to be careful then go with the lower day count

      Like

  15. Hi Aditya,

    Again money changers are offering Rs 54 for 1 SGD, well above 3% over spot rate. I am planning to convert 1k SGD for my trip to India. Do you know why the rate is so good?

    Like

    1. Hey Nitin

      Interesting, I wish I had insider information or a crystal ball :).
      Drawing parallel to what happened last time – demonetisation, this time maybe 2000Rs goes. It would be absolutely silly but given the ex Chief Economic advisor said that few weeks back anything is possible.

      Like

  16. Hi Aditya,

    I have some 50L worth NRE FDs maturing and HDFC bank has just cut rates to 6.3%, which I feel is too low. Indian equity markets are too high. Any thoughts on how to invest this money? I guess debt mutual funds are the only options. Do you recommend any?

    Thanks in advance!

    Like

  17. Hi Aditya,

    I noticed HDFC bank doesnt apply penalty for premature withdrawal of NRE FDs, I have never seen any other big banks allow this. I wonder if this is too good to be true?

    https://www.hdfcbank.com/personal/resources/rates

    Read these lines ” The Minimum tenor for earning the interest on NRE Fixed Deposit is 1 year. No Interest will be paid if the NRE Deposit is prematurely withdrawn before 1 year.

    No Penalty will be levied on premature closure of NRE Fixed Deposit.”

    So I am planning to just open 10 year FDs with 6.75% interest rate. If I go back to India or if rates rise, I can close and reopen FD.

    What do you think?

    Cheers!

    Like

    1. Hi Nitin,

      It’s a clever play of words here. Basically what they are saying is that if you withdraw before 1 year you get no interest. If your FD is longer than 1 year and you withdraw before the maturity they will not charge a penalty but will adjust the interest based
      on your tenor when you close. Most banks do this.

      Hope this helps

      Like

    2. You see for NRO deposits it clearly says there is penalty

      In case of premature closure of NRO Fixed Deposit (including sweep in / partial closure) the interest rate will be 1.00% below the contracted rate or the rate applicable for the period the deposit has remained with the bank, whichever is lower,except for the tenor of 7-14 days.

      But for NRE they explicitly say no penalty. So it looks like NRE is indeed the rate for the duration you kept the FD with the bank.

      Like

  18. Hi Aditya,

    Do you invest in SRS? I did some research and found it is really useful for foreigners to save tax, especially those whose income is above 80k. I wish I knew this 10 years back, I could have saved so much money, since it can be withdrawn after 10 years. Anyways, I am starting from this year. Would like to know your thoughts.

    Cheers!

    Like

    1. Hi Deep. I don’t think that will happen. Even if sgd inr goes below 51 it would be a short blip. The overall risks of a global recession are increasing and India cannot stay immune, Infact a currency depreciation might work better in Indian economy’s favor
      Cheers

      Liked by 1 person

  19. Hi Aditya,

    Want to transfer 70k SGD to my India bank account. I see Instarem offering good exchange rate comparing to others.
    is this still good time to do transfer ??? i’v got house registration at Bangalore by End of this month.

    any thoughts?

    Akshay

    Like

    1. Hi Akshay, do compare with Transferwise, on last check they had the best rates. Also check for the transfer limits, some banks might require extra paper work for larger amounts

      Thanks

      Like

    2. HI Aditya,

      Thank you so much. i’ve other question to ask. Sorry for posting in wrong blog.
      Have taken balance transfer approximately 50k SGD from few banks here in Singapore.

      The house am buying in Bangalore is worth of 75 lakhs rupees(current guidance value for the flat) , My father and brother contributing around 40lakhs rupees as cash (Bank cheque). and i am transferring 35 lakhs rupees from here to my father account.
      Am not going for any housing loans in India, in total we are paying the 75 lakhs rupees cheque to landlord. (from father savings account)

      will there be any issues transferring money to my fathers account and paying for house buying? also new house will be registered on my name, where i don’t have TDS account in India currently.

      kindly advise me how to proceed further?

      Akshay

      Like

    3. Hi Akshay,

      Why do you not use your own account to pay for the house instead of using your father’s account as the property is in your name. For buying a property over 50 lacs rupees you need buyer and sellers PAN number, you don’t need a TAN number.

      Thanks

      Like

  20. Hi aditya,

    I have about 250k SGD into couple of accounts earning about 2% in SG. I am a bit conservative and looking at the market sentiments, I foresee a dive and plan to invest in ETFs when it crashes (maybe in 2 yrs). I am planning to lock-in 100k sgd (eqv INR) in IDFC FD @ 8.5 for 2 yrs. The exchange rate has dropped around 50. Any views on the movement in the next few weeks? Any suggestions on investment options? I am not a PR and hence not planning to buy Condo @20% stamp duty.

    Thanks in advance

    Like

    1. Hi Anuj
      I would expect the Sgd INR rate to stay flat around 50.50, there are increasing risks for SGD to depreciate looking at the global sentiments so unless the oil prices go up dramatically, I don’t think SGD INR will cross 51.50 in next 3 months.
      Over the period of next 2 years SGD INR should be around 53 so do take that into consideration when investing in IDFC Fd. Given how the markets move on tweets these days its hard to predict anything long term (fundamentals go out of the window when tweets come in :))
      I would have suggested SGD denominated Indian bond funds around 3 months back but they have appreciated around 5% since. They are still not a bad bet and could yield around 5%p.a. over next 2 years. Fundsupermart has a few by UTI and HSBC.
      Staying cash rich or in fixed income securities is the way to go

      Like

    2. I am also similar boat as Anuj. I have accumulated about 300K SGD now. I think Indian equities havent gone up much. Midcaps have corrected a lot, so I am planning to invest in Indian equity funds in Fundsupermart. I just put in 50K on Friday. If markets fall during Oct- Dec, I will probably put in another 50K. Lot of Asian markets have actually not gone up as much as US markets. So there are opportunities, if you are in it for the long term.

      Like

    3. I don’t like Indian equity markets, they are too expensive. Indonesia, Thailand, Vietnam, Phillipines offers a better opportunity. Indian debt funds are good as another interest rate cut is expected and they offer a YTM of around 6% which is not bad

      Like

    4. BTW, stamp duty or ABSD is now 25% and not 20%. I have stayed in Singapore for 10 years now. Looking back, even with the 20% I should have bought a house, In 2009, when I came here there was no stamp duty and downpayment was 10%, but oh well, who can predict the future.

      Like

    5. Hi Aditya, UTI fund based in Singapore seems to have be caught into some toxic assets. I just check it has fallen 8% YTD! While HSBC and Aberdeen are up over 10%. Poor investors who went with UTI.

      Like

  21. Hi Aditya,
    Any comments about the recent budget? Indian bond yields have fallen and Rupee has become stronger. With this strength continue? Maybe this needs a new article by you πŸ™‚

    Cheers!

    Like

    1. Hi Nitin,

      The rise of Indian bonds was expected. The govt has been very vocal about RBI delivering rate cuts which the new Governor has delivered. I think at max there is one more rate cut on cards which should result in some more gains for Indian bonds. As with rupee there would be a short term strength maybe over next 2 months as monsoon unfolds. If the monsoon is good then rupee will strength further else fall back to 71 against the dollar.
      As for sgd inr, 50 will remain a strong support. I don’t see it giving away that easily.

      Like

  22. Hi Aditya,

    I have some NRE FDs with icici maturing. Initially I was thinking of repatriating them to SGD considering fragile INR status. But now looking at the stability, I feel I should just renew the FDs. Currently I see HDFC has 3 yrs NRE FD interest rate at 7.4% and no penalty for premature withdrawal. Should I go for this? What is your view?

    Like

    1. Hi Nitin. It is a good time to lock in FD rates as I expect the rates to come down in next six months. You could try and diversify with IDFC where the interest rate is 8.2% for 2 year NRE FD

      Like

    2. Thanks Aditya,
      I have ICICI, HDFC & Yes bank. I dont have IDFC, so I guess I will just go with HDFC. Yes bank looks very shaky at the moment.

      Like

  23. Hi Aditya, what would be your analysis on the SGD/INR movement now that election results are in? Would it be prudent to place some idle SGD funds in a NRE FD or would it make sense to wait for a better rate?Eager to hear your views. Cheers

    Like

    1. Hi,
      Given the interest rates in India are set to decline its a good time to lock your funds in NRE Fd. Idfc bank is offering upto 8.2% for 2 years.
      Thanks

      Like

    2. Thanks for your reply. What’s your view on sgd/inr exchange rate at the moment ? Which way do you see it moving ?

      Like

    3. It should stay around 51 mark, there is a increasing chance of SGD falling against the USD due to trade war between China and US which would prevent SGD INR moving upwards

      Like

    1. Hi

      It will oscillate between 50-52 in coming days and can move sharply based on Election news coming from India

      Like

  24. Hi Aditya,

    What is your view now on INR after the budget? Are you worried about your Indian rupee exposure? Should we convert and bring back the money or do you think in the long run India will be okay?

    Cheers,
    Nitin

    Like

    1. Hi Nitin

      In my view if one is earning 7% or more on Indian investments then they are ok. I will leave the money in india and not bother too much with exchange rate fluctuations.
      My personal strategy is to get exposure to Indian markets through IDFC NRE account that offers 7% interest rate on savings and sgd denominated India specific bond funds. I think if SGD INR crosses 53.5 it would be a good time to convert and invest or buy india bond funds.

      Liked by 1 person

    2. Thanks Aditya, looking at the kind of scams and nbfc crisis going on in India, I really worry about our money there. There is no deposit insurance in India and people here tell me that is risky. In Singapore there is 50k deposit insurance. So relatively the risk we are taking with sending money to India we don’t get compensated. We get hit with depreciation as well as risk of capital loss.

      Like

    3. Hi Nitin

      Unless you are putting money in a cooperative or a small time bank the risk of loosing capital is minimal. Yes, there is very small deposit insurance however both government and RBI will not let a bank fail. NBFC and corporate borrowers are a different story. Choosing your bank carefully – DBS, HDFC, SBi etc should poose near zero risk. I like IDFC for some small exposure as the savings interest is 7% from where money can be withdrawn easily anytime.

      The deposit rates in Singapore are lousy but one can get 2-3.5% on savings with Uob and Bank of China.
      Rest investing in equities, gold and collectibles is a good idea. Having enough liquid cash to jump in when market falls is a must.

      Liked by 1 person

    4. Hi Aditya,
      Regarding deposits in Singapore, I compared them and finally went with ICBC step up deposit for 1 yr, it gives me 1.95% with flexibility to break it in between and still get interest until that point. I dont intend to have credit card spend as criteria so I ignored most of those that have conditions. I also have DBS multiplier as my salary account and that gives me 1.9% returns but only upto 50k balance with just nominal credit card transaction.

      Cheers!

      Like

    5. Hi Nitin,

      You could consider Uob one account as well, salary credit and credit card spend of 500$ a month earns 2.4% on balances upto 75,000

      Liked by 1 person

  25. Hi Aditya,

    Now I have about 40% of my money in SG and 60% in India. I dont have SG PR and may have to eventually go back to India. I am planning to still keep most of my money outside India. The recent INR strength has got me excited again to move some money back to SG. I have about 23L in Yes bank(which is about 6% of my networth), which I am jittery about, the remaining is in ICICI bank. So I am planning to repatriate that 23L to SG. ICICI is charging about 2.3% over the spot rate i.e. 52.10 for outward remittance, when the spot rate is 50.80. But I think I will still take it. I will continue to invest in global etfs like I have done or may be just keep it in SGD for sometime. Any thoughts?

    Like

    1. Hi Nitin,

      I think that the premium Indian banks are charging will stabilise once the Rupee stabilizes. There is a chance for it to touch 50 and bounce back from there this week. Transferwise from what I know offers a much better rate for both transferring into and outside India. I think it’s 1% to move money out of India, could be lesser.
      You could check them out.
      There are some india focussed debt funds in Singapore that you could consider to invest the money if that’s an asset class you are looking at.

      Like

    2. Thanks Aditya. Transferwise allows only INR to USD. Also limit is 3.5L at a time and it is very new. There is another provider also called. https://remittance.fxkart.com/
      But these guys dont know the concept of NRE. The FXKart guys do for resident Indians LRS and ask for kyc and stuff. I dont think they are designed for seamless NRE transfer. I could get into trouble using these services. Have you or any other NRIs used them to transfer from NRE account?

      Like

    3. Hi Nitin, I have used transferwise from Singapore and find their service seemless. I haven’t personally tried to transfer out of India, but do know that DBS india also has decent rates.

      Like

    4. Thanks Aditya, you are right, DBS and even Kotak rate is 51.80. SBI is 51.70. The worse are ICICI and HDFC both 52.10. But now I have no patience to open account with DBS, so I guess I will have to make do with ICICI. I will watch the rates for the next couple of days.

      Like

    5. That’s precisely why I don’t deal with ICICI, never have, never will, I have always found them pretty bad with hidden charges and unreasonable fees. Dbs is pretty good. Can open account in less than a week though if you want to try

      Liked by 1 person

  26. Hi Aditya,

    Trend now going downward for SGD INR. What you think rupee again getting stronger? Do you anticipate it to go up, oil price now going down, Iraq issue is also resolved.

    Thanks
    Deep

    Like

    1. Hi Deep,

      Sgd Inr peaked at 53.90 and any rate over 52.5 was a good rate to transfer. In the short run, ie December SGD INR could get close to 50. There will be general Usd weakness in Dec and the Rupee downfall can start again on the back of election results in India.

      Like

    2. I dont think it will go below 50 in 2018. 2019 will be volatile with a lot dependent on Indian elections and possible US elections.

      Like

    3. Hi Deep

      It’s market reacting to drop in oil price however the political risks remain. I do expect volatility to persist. If you are looking to transfer then 52 on a bounce is a good number and even investing in India focussed debt fund in Singapore is good

      Like

    4. Thanks Aditya.
      I never invested in funds in SG while pretty familier of India MF market. Could you please highlight any good Debt fund for direct investment in SG i.e without broker.

      Regards
      Deep

      Like

    5. Hi Deep,

      I do not know if investing directly with mutual fund companies is possible in Singapore. The 2 funds I like are HGIF India Fixed Income fund and India Fixed Income AM 30 fund

      Like

    6. Hi Aditya – Thanks for your earlier feedback. Yesterday OPEC decided on oil export restrictions resulting into increased crude oil price. The impact seen on exchange rates.
      I just wanted to know is this just a momentory impact ? And other factor like India current political scenario would take precedence? I did not see much of a impact on INR post recent RBI noise?

      Thanks
      Deep

      Like

    7. Hi Deep

      Given the recent electoral losses and change of RBI governor, I think the govt will want the rupee to be stable with a bias to strengthen. Unless oil gains significantly we should see Rupee at 71-72 mark against USD and SGD around the 52 mark.

      Like

  27. SGD INR crosses 53 and quite likely to move towards 54 quite soon as soon as oil prices increase in November after sanctions on Iraq. Thoughts?

    Like

    1. Hi Sriram, I think that SGD INR might touch 54 within Oct and if it does that one should look at investing in NRE deposits. Nov being Diwali govt might want to announce some relief, by way of duty cuts, if the oil continues to rise.

      Like

  28. Hi Aditya. Nice post…although after long wait πŸ™‚

    I agree with most of the points you made in the blog except one on the INR depreciation being welcomed by ruling party before elections next year.

    Many factors like fed rate hikes, good global growth, higher GDP growth in India and higher oil prices will put an upward pressure on inflation which government can ill afford pre-election.

    Knowling the indian voters, they focus more on inflation no matter how rosy the GDP numbers may seem.

    Besides, I also have the same query as Sriram on US FCNR FD strategy. Would it be good move ? Awaiting your post on it.

    Like

    1. Hi Punit,

      Elections in India are fought with money and its the urban voters who care about issues like inflation. Rural India its the money might and political donations go a big way towards it. But yes i do agree that the govt does not want runaway inflation and the hope that weaker currency boosts exports and creates employment which has been a chronic issue.

      Thanks

      Like

  29. Thanks Aditya for the insights. Would converting SGD into USD and deposit in FCNR fixed deposits for the next 2-3 years be a good idea if we intend to stay in Singapore for the near term? And would you recommend indian banks or Singapore banks to do the same.

    Like

    1. Hi Sriram, good question. I am analysing the payoff and various scenarios and will post on it in next one or two weeks. Stay tuned

      Like

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