Remittances, SGD INR

SGD INR: Rollercoaster First few months of 2021

209 Comments

Just yesterday, one of my friends mentioned going to universal studios and experiencing the rollercoasters and that reminded me of movements in SGD INR in the past few months. I said, you can experience a roller coaster just by trying to time remittances from from Singapore to India

Having started the year at 55.25 the pair saw lows of 53.80 by March and sharply reversed back to 55.75 in first week of April. That is a move of approximately 3% down and back up within 3 months which is unusual in the currency markets.

I had expected the pair to drop to 57 SGD INR 55 achieved, Target 57 last year but with RBI intervening in the forex markets and India’s better than expected figures of containing covid resulted in short term strength.

The rupee moved sharply lower after the RBI MPC meeting though there was nothing in the meeting that would warrant such a move. So what has caused such volatility in SGD INR?

Covid Connection?

With Covid cases rising sharply over the last month the fear of economic recovery being derailed is high. One could attribute this move to Covid – however, if you look at exchange rate in September 2020, when India experienced the peak of first wave, the exchange rate was between 53.5 – 54. So I don’t think its covid anymore at play here.

Correlation to Indian Bond yields?

Similarly the Indian G-sec Bond yields have fluctuated between 5.8 to 6.20% in the past three months and seem unlikely to have caused this move. Moreover, with a large borrowing agenda in 2021, RBI would do everything in its power to keep the yields stable / low thereby containing the cost of funding for the government. So I don’t think the expectation of increasing yields would have caused this move.

Falling Oil Prices?

Brent Crude traded close to 70$ in early march and has fallen back towards the 60$ mark in April. India imports almost 80% of its oil which is traded in USD. Having a strong rupee when oil prices are high and letting them fall a little as oil goes lower can help the cost of oil in rupees stable. I believe that this could be a small factor in RBI allowing the rupee to correctly sharply lower and I would watch the oil prices over the next few months to get a sense of where INR may be headed. However, I don’t think this was the real reason.

RBI reducing intervention in the forex markets?

This I believe is the real reason behind the rupees move lower. There was a very low risk carry trade in the market whereby an institution with access to dollar market would borrow in dollars and invest in rupee bonds thereby having an arbitrage of anywhere between 1-3%. The belief was that RBI would intervene and keep currency anchored around the 73 mark against the USD. RBI may have decided to purge such trades by either mopping up dollars temporarily or not intervening in the forex markets.

I am not saying that RBI is manipulating the currency but tri agenda of subtly boosting exports, lower oil prices cushioning the cost of outflow and objective of flushing out traders with one way bets might have resulted in the sharp moves recently.

What to expect over next 3 months?

I think that 55 is now the new base rate with fluctuations of Rs 1.5 on both sides of the mean.

With MAS scheduled to release monetary policy data sometime in April, SGD INR could touch 57 in a knee jerk reaction or fall back to 54 in a quick move. There are analyst reports that suggest that with economy still not open to tourists SGD may continue to remain weak against the US Dollar. However, with housing prices inching up I don’t think MAS would want a weak dollar which would make Singapore properties cheaper for foreigners.

In a nutshell, I expect the roller coaster ride to continue and would take any move above 56.25 to transfer and invest in India. There is still value in some sectors of the equity markets and then there are low risk investments like Bharat Bond which I analysed in the previous post – Bharat Bond Better than NRE FD

209 thoughts on “SGD INR: Rollercoaster First few months of 2021”

  2. Considering INR is kept artificially strong and USD rates are high nearly 5% Vs INR rates of 7%, does anybody have any ideas how to benefit from this?
    I have an idea of moving INR funds to USD FCNR deposits and lock in the 5% rate for 5 years. For sure USDINR will cross 100 in 5 years and we make 5% each year.

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    3. There will be fluctuations and it’s a fact that RBI is managing the rupee to not weaken too much. Ideally it should be 85 against the is dollar but that would mean giving opposition (who can’t be bothered with economics) an election agenda.
      So now the movement is all dependent on sgd against USD which is rightly tracking lower with US interest rates expected to stay high.
      I think 60 is the new floor for sgd Inr

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  4. SGD INR is on a uptrend and I think above 62 will be a good time to convert and invest in fixed income securities yielding 7.5% or above.

    As always, look at your portfolio comprehensively and decide

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    1. And SGD INR goes past 62, Singapore escapes a technical recession. It could go back to 62.5 area though 63 would be nice

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  5. And SGD INR nears 62. With US debt default looming a sudden flight to safe haven sing dollar can push SGD INR to 63

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    4. Gayi bhaes paani mein 🙂 SGD strength was a mainly due to a flaw in the way SG controls inflation using exchange rates, instead of interest rates. So the strength was actually a sign of weakness and not strength 😉 Now that inflation is coming off SGD strength is coming off.
      We havent even factored in China slowdown, geopolitical tensions etc India should fare much better in this environment than SG. So as always I am bullish INR. More so now than ever.

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    5. Are you really always bullish on INR? 🤔
      Just a few month or a year back there was a comment where you were concerned about your portfolio value dropping as SGD INR went from 55 to 62, it’s still above 61 today!

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  6. I knew SGD has peaked, INR prospects are much better. The inflation in Singapore is local driven frenzy in property and COE market. Strong SGD has badly hit growth. I have been saying this since long time. SGD cannot be kept strong.

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    1. Don’t forget SG administers monetary policy using currency bands which means that if inflation persists then strengthening currency is the only option. Increasing interest rate here can cause stress in property markets and people in Singapore are heavily invested in local property.
      With China opening up and still a export powerhouse INR can’t stay relatively stronger and still export.

      World needs cheap products to get inflation down

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    4. Yes, India software exports now pay for our oil bills. So CAD is going to be low. GST collections are solid. Already see Indian bond yields falling, all my debt funds are showing nice gains.

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    1. As of now, SGD is reacting more to fed rate hikes vs INR. Once there is clarity on end rate SGD would gain strength again. Anyway, unless you are trading in the pair these movements don’t mean much 😉

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  8. Finally BOC makes a sensible move, they had become greedy by trying to pay interest only if you bought their wealth products which in my opinion were not exactly great.

    This though shows that banks are not very sure which way the interest will move and want to have liquidity by offering higher rate but not necessarily locking in for long periods of time.

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    1. Aditya, would like to know where do you keep your cash in Singapore, in BOC smart saver or some other high yield savings accounts?

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    1. Probably but it’s the long term which really matters. Comparing with exchange rate in 2007, SGD has moved up 5.6% yoy. So if someone brought money to Singapore in 2007 and left it as ia it would have yielded 5.6% pa for last 15 years. I think 58 is the new base with spike to 62 still possible or worse if border tensions with china escalate

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    2. Damn! I was wrong. SGD just keeps climbing. Now I can get 48.9L for 80kSGD. It is just insane. With just 2 years savings in Singapore I can transfer 1cr to India and buy a house. Tell me how does this make any sense?

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    3. A little bit more chaos in the markets and 63 might happen, if not 63 then 62 being crossed is highly possible.

      It’s nothing new, people working in US with 2 year of savings could buy a 3bhk house in a ok locality in a tier 2/3 city even 15 years back.

      India markets and property has appreciated a lot in the past 20 years but are the returns really extraordinary when adjusted for exchange rate? Especially against SGD – probably no.

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    7. I think it is stabilizing around this level. The move from 58 to 62 was very fast. So now it is spending time around this 62 mark. Now we need to see the Adani saga fallout whether it impacts the Indian broader macro.

      Singapore Non oil domestic exports came in weak, as I had expected. You cannot keep a strong currency when you are an export oriented country. So I think the SGD strength is overdone already.

      I think SGDINR should end the year 60-62 range.

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    8. Before that very likely to run to 63.5, it should be a short sharp move.
      Tail chance of 65 is also there, SG inflation is still high and only other option is to strengthen currency to manage it

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    9. The exchange rate divergence between usdsgd and usdinr was happening with expectation of rate hikes subsiding. With further rate hikes on the cards, the recent up move has stalled. It went sharply to 63 but did not cross. Need to wait for further rate hike fears to subside before SGD INR upmove starts again

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  12. I have a question for people who have been here for a long time and have kept their money in India. If you now convert your networth to SGD, if looks very low compared to the start of the year. Do you feel bad, or we shouldn’t care because only our INR networth matters to us?

    Also I wonder if this is a one off spike in SGDINR and then for long term it will be around this level, allowing us to recoup the notional loss in INR networth or is this just the beginning of major INR depreciation?

    In the past I was quite bullish on INR. But now the main thing which has changed is USD has started depreciating, RBI manages INR Vs USD. Also in India most people care only about the USDINR rate as a barometer for exchange rate. Nobody knows how SGD is doing. So imagine SGDUSD hits like 1.25-1.28 and USDINR is at 80-81, we are still losing in SGD terms by another 8-10%.

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    1. I will let people who keep most of money in India comment but in my opinion keeping it diversified makes sense.

      Obviously, when things are concentrated the ride will be volatile. Diversifying makes it boring and a smoother ride.

      is there scope for SGD INR to touch 63 – absolutely! Will it happen in next 2 weeks unlikely. Having said that if it goes up to 63 that quickly then correction back to 60 and stabilizing around there should happen.

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    2. Looking at how stable the 60-61 level has been so far. I think this is the new base now for SGDINR. I am now planning to just keep the loan I took here in Singapore only in high yield savings accounts. 5% yield is kind of assured for the next 1 year.

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    3. India assets in the current high interest rate environment will need to earn atleast 12% post tax to justify the risk premium.

      However, if you compound at very long term then even that 2% extra over currency appreciation adds up

      If you sent money to India at 27 in 2007 at a modest 6% pa return the current rate should be 72 to SGD. Now if it was put in ppf or equities then gap will be higher. Equally, if the SGD assets earned 2-3% it would not be worth taking money to India.

      So it boils down to what alternatives one has and how much is risk appetite and patience most of all

      Liked by 1 person

  13. Hi Aditya,

    I’m EP holder, am I eligible to get 4% interest rates in Singapore banks? And which bank is offering good rates for foreigners like me.
    I was thinking to transfer about 30k to India this week or early next week. 4% really good to have the dollars parked in Singapore bank accounts.
    Can you guide me pls? . Thank you.

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    1. Hi Akshay

      You can put money in RHB HYSA account or Bank of China Fixed deposit.
      All residents are eligible.
      Cheers

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    2. You need to gamify it a bit. RHB RYSA gives 5% interest on incremental balance in that month. So to maximise gains, open an HSBC EGA account which gives you 5.3% on incremental balance. Then everymonth do merry go around 🙂

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  14. Wow! 61 is hit. This kind of FX volatility is insane. RBI is keeping INR pegged to the USD inorder to accumulate reserves while SGD is appreciating freely. I think Adtiya is right we might hit 63 soon if this continues.

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    1. It’s not really volatility, SGD was supressed even though policy bands were recentered. It would be nice to see 63 but above 61.5 it’s a great opportunity to transfer.

      However if you are able to but money wisely in Singapore savings accounts earning 4% or more then keeping money here is equally good.

      Liked by 1 person

  15. My personal view is SGD is overvalued right now against both USD and INR. I am taking an 80k SGD balance transfer loan from Citibank for 3 years @2.5% fixed rate. SGDINR @ 60.5 is a great price for a long long time. Like imagine when 53 was hit in 2013 but it was never crossed until like 2018. So I think you won’t get his price again until 2025.

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    2. Actually the EIR works out to be closer to 5%. It is like for every 10k I will be paying $250 per year even though the balance is reducing. So imagine for the 3rd year I would have already paid off 2/3rd of the loan but still I will be paying $250 per 10k. So it is not based on reducing balance. So I am not sure if it is a good deal.

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    4. Just look at SGDCAD, there was a time when CAD was up 1.1 SGD, now it is at parity. AUDSGD used to be parity and now 1SGD = 0.9AUD. SGD is clearly in a bubble. This is not even about INR or USD. This is just about SGD. Too much of inflow from China, Taiwan and HK and MAS also uses exchange rate to control inflation. But next year when there is global recession MAS will have loosen policy I expect SGD to fall 10% overall. Against INR, it will probably go back to 58.

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    5. It’s always about USD 🙃. SGD was 1.5 against USD in 2007 and even during pandemic it did not come close to it. No one knows what is the composition of basket that SGD tracks against but SGD INR is a function of USDINR and USDSGD.
      So if inflation persists then currency appreciation is the only option left – having housing interest rates cross 5% can cause widespread stress in the mortgage market which I don’t think any govt wants

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    6. Agree with your view Nitin. I feel that sgd to inr rate drop is close to peak and may hover around 60 for next 1-2 years surely.

      Planning go for NRE FD or any alternative investment with above 9% post tax returns?

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    7. I just signed up for Citibank 1yr balance transfer for 3.5% processing fee. The EIR comes to around 3.77% about the same rate of FD in Singapore.

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    8. Hi MS Reddy, my plan is to just stick with Indian bond mutual funds. Right now yields have fallen a lot. So I would stick with 3yr duration. I dont favor NRE FDs as I dont want a big headache of tax management when I return back to India. Just curious are you PR in Singapore? If yes, dont even bother sending money to India.

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    9. Thanks Nitin.
      My profile is almost same as your profile except that I am PR since 2008.

      Thanks for the reply. I will start exploring Indian Bond Funds.

      Liked by 1 person

  16. Going by last 15 years trend, SGD to INR rate jumped around 120-140%.

    With same pace, SGD should touch 100 Rs by 2030. Too early to predict but most likely it may happen. Any thoughts?

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    2. If Singapore continues becoming a playground for ultra rich then yes it can happen. Though I think there will be a period where it could go to 63 and then go back to 58. Indian economy will grow which will give strength to currency.

      If one can generate 4% risk free return in Singapore then coupled with appreciation in SGD it is more or less equal to putting money in NRE in India

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  17. Hi Aditya,

    Do you think it is better to convert now at 59 and invest in Indian debt MFs with 7% interest rate or just invest here in SG FDs at 3.85% interest rate?

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    1. Hi Nitin,

      I would keep money in SG and invest in FDs here. Some banks are even offering 4.1% and I think the rate will peak around 4.5-4.75%

      Accounting for cost of transfer to India unless the tax free rate (nre FD) crosses 8.5% or a equivalent instrument SG FD are better bet

      Liked by 1 person

    2. Thanks Aditya. Are you also investing in FDs in SG or in T-Bills? Also would like to know what is your preferred duration? 6 months and then reinvest or 1yr -18 months of lockin?
      I see UOB has 3.85% for 6 months for>50k and CIMB has 4% for 18 months. Then there is HSBC promo going for EGA account but it is for 4 months, this is the most liquid option.

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    3. Hey Nitin, FDs give a fair bit of flexibility. I have been doing 1 month in BOC and rolling every month as interest rates have been rising. RHB also has good interest rates of 4.1%. T bills are also good for 6 months.
      I think that SGD INR should peak between 60-61 so moving some money to India if interest rates cross 8% would be a good idea. I also think that interest rate cuts may start in second half of next year which would mean that equity mf become attractive again.

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    5. The move was expected and i think It can go upto 62. However, above 60 and 7.5% interest in NRE is a good idea. As always spread it over next few weeks and months.

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    3. Hi sir
      Plz post your views on SGD —- > INR rate for 2023.
      Plz also suggest better options to manage 70 million INR which is in NRE account and currently generating around 7.25%-7.5% returns (with low risk). Thank You for your expert advice.

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    5. Wow MS Reddy, 70 million INR as in 7cr right? Well done! NRE FD is good as long as you are in Singapore. But if you return to India, it is not tax efficient. It is better you slowly learn investing in debt and equity mutual funds. You can hire a fee only advisor when you move to India, to set your asset allocation correctly.

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    6. You have a referral code for instarem? Rates are closing in on 61 and i think that’s a good time to send 🙂

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  19. This seems like one of the worst depreciations for INR against SGD in the recent years. I just looked at my tracker. SGDINR was 55.25 beginning of the year and now it is 58.2, so about 6% depreciation already! In the previous years I noticed only in 2018 there was this level of depreciation and going back until 2013 there was only 2-3% depreciation per year in all the other years. So this year is quite exceptional!

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    3. RBI is keeping the rupee extremely overvalued, I think we will see some major depreciation pressure sooner or later. If someone wanted to bring their money offshore, for their kids education overseas or something like that, now is the time.

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    4. Its more of SGD weakness that surprises me, generally SGD strengthens to combat inflation but this time around SGD has hovered around 1.38-1.4 even after band adjustment.

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    5. I think SGD will get hit due to low CNY, EUR, AUD etc. So net net I think SGDINR should be range bound 55-58 unless there is some major blowout in oil prices or some kind of massive risk aversion and tailspin in the financial markets.

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  20. Hi Aditya,

    what your view on SGD —> INR rate for next week?. Planning to transfer $30k.
    i’m looking 57+ rate.

    Do you think is it good idea to wait? or send it now.

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    1. Hi Akshay. It’s already crossed 57 and in a week the max it could go is 57.5 so might as well transfer half now and see if you get better rate for remaining half

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  21. Hi Aditya, is the rate provided by SBI in the ‘SGD TO INR’ tool correct?
    Seems it shows the interbank rate. In addition, how do we remit using SBI, if the rates are good?

    Platform SGD to INR Spread
    DBS ₹56.11 1.11%
    ICICI Bank ₹56.03 1.25%
    Transferwise #REF! #REF!
    SBI ₹56.74 0.00%

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  22. Hi Aditya,

    Any ideas on the cheapest way on converting money to INR for India vacation?

    We could use SG based credit card, or some wallets like revolute, youtrip etc or just transfer to INR and then spend.

    Most small transactions are not a problem, but if my wife suddenly decides to buy some jewelry worth like 5L INR, then I want to really get the best rate.

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    1. Hi Nitin

      Transferring money and spending is the best way, most cards build in 2.5% in exchange rate. Use an indian card if you have one and that way you could earn rewards that will offset the cost of transfer.

      One option could be to chack the rates with money changers, they used to be even better than spot rate before pandemic, i don’t know what they are now but if better than can just carry cash – limit is upto 2.5 lac rupees if i am not wrong.

      Liked by 1 person

    2. Thanks Aditya. I signed up for revolut and it allows 5k sgd currency conversion at spot rate for free every month and any spending on it unlimited at spot rate. You can top it up via credit card. I think this is a good option. Money changers, I will check them out, I had myself got 1% above spot rate back in Dec 2019, just before pandemic during my India trip. But the max I would carry would probably be 1L, anything higher is a bit risky.

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    1. I think anything over 56 is good. There is a outside chance of quick increase to 57 if Russia aggrevates attack but otherwise SGD inr should hover around 56

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    2. Hi Aditya
      Any views on SGD —> INR rate in next 2 months. Planning to transfer $100k and do NRE deposit.
      Looking around 56+ rate.

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    3. Hi MS
      MAS policy meeting meeting is expected to steepen the curve which should mean stronger SGD against basket of currencies. If that happens then SGD INR will cross 56.

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    4. MAS has tightened the policy using dual parameters first time since financial crisis. SGD strengthened and SGD INR is above 56

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    5. Hi sir
      Rate is around 56.25 now. Any predictions/views for next 1 month on rate move ? I am planning to transfer $100k and deposit in to NRE. Plz advise. Thank You.

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    6. Hi, anything over 56.5 is good though I do expect rate to touch 57 over a month. Will really depend on oil price and geopolitical situation

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    7. Hi Sir

      Any views on SGD to INR in next one month.
      Seems USD going strong and SGD vs INR going in opposite direction.

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    8. SGD is weak even though MAS has tightened the band. Ideally it should be at 1.36 or lower….once that happens SGD INR will go to 57….but central banks know more than you and I and what MAS and RBI are planning is best known to them

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    9. Hi MSR, if you didn’t already transfer, I would just say hold on since RBI is preventing rupee from falling and keeping it artificially overvalued, to keep imported inflation low. I think we will see sudden sharp plunge in rupee, once RBI stops defending. It is a bit risky call to take, but worth taking.

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    10. I agree with Nitin…that was going to be my response as well. RBI wants to smoothen the fall of rupee and guide to 80 and is hoping that petrol prices come down

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    11. MSR exchange rate is good right now. 56.4! I am transferring 9k SGD to India for spending during my June vacation.

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    12. Thanks Nitin. Managed to transfer 30k at 56.50.
      Will keep a close eye for next few days and transfer rest in sub sets when rate move up.

      Liked by 1 person

    1. It is better to engage the services of some CA in India they will do it for much cheaper. Via Banks like ICICI it costs 2% in spreads.

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    4. Thanks Nitin. What i am most interested in are the costs. Not planning to bring back anything but just looking at costs
      What kind of spreads did this forum offer?

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    5. They said they can do it for few paise like 10 paise, because they have wholesale deal with the banks. But from what I recall, they deal with only 3 specific banks, bank of Baroda etc.. so you will have to open as account there. Don’t know all the details, since I didnt pursue further.

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  25. 55.45 inspite of war, crazy rise in oil prices 🙂 So my strategy so far has worked perfectly. Don’t keep any money in SG if you plan to move back to India. If you plan is to stay here for sometime and then go to another 1st world country, then it is okay. But if you plan to move back to India and you don’t have PR, then keeping SGD here is a losing proposition.

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    1. Thank you Aditya, i have got around 30k to transfer. Means coming days for sg/Inr will see down side. Any idea how long this down trend may stay?
      This 30k will be my savings and planing to put FD on senior citizen name so yield will be slightly higher in co-operative banks.

      Please share you thoughts.

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    2. With what is happening in Russia things are going to be volatile. If your aim is to invest in FD then transferring now vs in 2 months with higher exchange rate will be the same.

      Though I do expect the interest rates in india to go up as Federal reserve increases rates. So locking fd for long term might not be a great idea

      Liked by 1 person

  26. Hi Aditya, want to transfer 30k SGD to India, is this still a good time 55.55? Or waiting a few more weeks would give more exchange price?
    Pls share your thoughts. Thank you.

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    1. Hi ASG, I think there is scope for it to touch 56.5, however RBI has been rather active in the market so it might be a drag of 2months before it touches 56.5. However, if you are investing or paying off loans then transfer half now and wait for a fee weeks for the remaining (that’s what I would do)

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    3. Thanks Aditya. Yeah managed to get 56.10 on 15th Feb. Transferred only 20k.

      Got to send another 25k batch soon. Not sure if we can get 56.20 again. Looks like down trend started right? What you suggest pls.

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  27. Okay, so thats all the legs that SGD’s got. 55.18. I maintain my stance, keeping money in developed market currencies in just bank accounts or even bond funds, wont earn you anything. Cash is trash, if it is developed market currency. Take risk, move to a high yielder EM currency like INR, lock in the current long duration 10yr is yielding 6.7%. There is good chance Indian bonds will be included in the global bond index and that would bring down the high yields you get in Indian bonds. Overall I am very bullish INR, Nifty and global stock markets. So, I am not keeping anything in SGD.

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    1. SGD INR is not just about SGD there are headwinds for INR as well. Inclusion of Indian bonds depends on taxation and I haven’t heard anything in budget that says that a policy change has happened. Additionally, India has to repay 250billion dollars in bonds for which there are ample reserves but there would be refinancing costs. If inflation continues SGD and INR will diverge, MAS would manage inflation through currency strengthening and RBI by interest rate increases. Indian markets are over exuberant (will not use over valued as valuation seems to have gone out of fashion these days. Stocks get valued on any random parameter) and allocation may shift from India to China markets. I agree that keeping SGD in bank in Singapore or even money market funds is not worth it. Staying diversified and invested is a good idea

      Liked by 1 person

    2. Hi Nitin, Aditya

      What are your views on SGD —> INR rate in 2022? Better to lock NRE FD”s for 10 years or wait for 1 more year and lock at around 7%+ rate ?

      Please advise. Thank You.

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    3. Hi Reddy, if you are in for 10 years then buying bharat bond etf maybe a better bet. Interest rate cycle will only move up. If fed increases rates by 1%, RBI will be forced to go up by atleast 1/2 percent. Banks have already started trying to lock in interest rate now for longer term as they expect a upcycle. I would wait till March, when federal reserve meets and then decide.

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  28. SGDINR at 54.7! Wow! I reiterate my stance, if you are not PR, don’t keep even 1$ in SG, transfer it to INR the same day you receive your pay.

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    3. Hi Sir
      Please also post easy and best option for NRI to move NRE FD to Bharat Bond ETF and compare risk and returns for 5-10 years between NRE FD”s and Bond ETF. Thank You

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    1. So it’s like, we need top up thr wallet first? and only we can make transfer to India. Any idea how much they will add fee for each transaction? (Topup —> transfer to India)

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    1. Hello Guys, This time I converted via Instarem as there is a promo 1st time transfer you get $30 rebate. I was amazed, the moment I transfered from my DBS account to their Instarem PayNow account, that same moment the money hit my ICICI NRE bank account in India, via IMPS. This is as fast as it can get.

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    3. 55.90 today. Any views on rate for next 3 weeks? Planning to transfer bulk amount in next 1 month. Please advise. Thank You.

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    1. FIIs have started selling Indian stocks. If we have a big risk off I think INR will fall. But I am more interested in how much the global and Indian stock markets fall and how soon should I start buying or should I wait. It has been ages since we had a proper correction.

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    2. There might be a knee jerk up move next week but if this variant is really of concern and we common people will not know in time, then the selling will continue. Part of me also questions the timing of the news, it’s almost like it’s released to give market a reason to correct

      Liked by 1 person

  33. Wow, just look at the strength of INR. Amazing 🙂 2013 SGDINR hit 53. If someone had dont me that time that SGDINR would be at 54 handle 8 years later, I wouldnt have believed that 🙂

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    1. 2013 rate were abnormal due to India running low on forex reserve and Singapore dollar being very strong to control inflation. Rates were down at 45 over next 2 years. If inflation goes up then MAS might let SGD strengthen some more which will bring sgd inr to 57

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  34. Dear Aditya, what is the projection for SGD to INR in the week of 08-Nov-2021? Is it a good time to convert forex? Will we get 55.50?

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    2. Hi, can’t say what the rate would be next week but I do expect general SGD strength over next 6 months which should push sgd INR to 56.5 mark. If you have need for money or can invest then any rate is a good rate to transfer.

      Liked by 1 person

    1. It is going lower and lower. I think it is better to just convert now. There is no guarantee that rupee will fall. If SGDINR goes back to 53, then it will be very sad to watch it.

      Like

    4. Wise is really good. Within 15 mins the money went out of my DBS account and hit my ICICI bank account, just in time for me to buy today’s Nifty small dip before the 3pm MF cut off 🙂

      Happy Diwali to all of you guys and wish you all, all the best!

      Like

  36. MAS tightens the policy band. This can push SGD INR to 57. Read the news on Reuters, excerpt below:

    Singapore’s central bank unexpectedly tightened its monetary policy on Thursday, saying the move will ensure price stability over the medium-term.

    The Monetary Authority of Singapore (MAS) manages monetary policy through exchange rate settings, rather than interest rates, letting the Singapore dollar rise or fall against the currencies of its main trading partners within an undisclosed band.

    It adjusts its policy via three levers: the slope, mid-point and width of the policy band, known as the Nominal Effective Exchange Rate, or S$NEER.

    The MAS said on Thursday it would raise slightly the slope of the policy band, from zero percent previously. The width of the band and the level at which it is centred will be unchanged, it said.

    “This appreciation path for the S$NEER policy band will ensure price stability over the medium term while recognising the risks to the economic recovery,” the MAS said in its statement. It said core inflation is expected to rise to 1–2% next year, and close to 2% in the medium-term

    Liked by 1 person

    Reply

    1. It seems the increasing Covid cases is now impacting SGD as a headwind, while India has put Covid behind and it is a tailwind for INR. So it is mainly crude oil which is the wild card here. If oil goes to $100 which is quite likely we could see SGDINR crossing 56 level and heading toward 58 again, I think this is possible early next year.

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  37. Hi, Any views on SGD to INR for the next 2 weeks, keeping around 50k to transfer.
    Do you think Diwali is the safe time to transfer sgd?

    Akshay

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    1. Hi
      There is chance to get 55.5 over next 2-3 weeks.you can target that rate. With US debt ceiling drama unfolding volatility is expected.

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    5. Hi Reddy,
      It’s possible. All would depend on oil price I think and what RBI wants to do about rising yields but 56.5-57 would be a good rate to transfer. Now if a war or some other political event happens the outlook will change

      Cheers

      Like

  38. 54.75! wow, imagine you hold a few 100ks of SGD in cash in Singapore, the amount of money you lost in just interest. This is what I have learnt. Developed market fixed income wont give you any yield. You need to take risk. Either in EM fixed income or in EM/DM equities.

    I would suggest look at your assets allocation. How much equities vs bonds you want. The bond component should be in the currency where you will retire. So, if you dont have SG PR and you are never going to get it even, then it makes zero sense to keep SGDs in your bank account. Decide on your asset allocation and move your bond component to India and invest in NRE FDs or bond funds and earn nice 6-7% yield. SGDINR will keep moving up and down but in the long term wont generate any meaningful returns in INR terms if you keep SGD. India is not the same India as in 2013, RBI has accumulated massive reserves so INR will not just fall off a cliff like it used to.

    I keep zero SGD now. Any new money I save, I invest it straight away in ETFs with interactive brokers and most of existing money I have already sent to India.

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    1. You are correct Nitin.
      From 56.85 to 54.50 in 3 months. Almost 5% drop. NRE or Managing INR in India seems better option.
      Indian equities running like a dark horse and INR strengthening.

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    2. I think if you get around 55, it is better to send money to India rather than keeping SGD cash here and waiting. There are a slew of IPOs lined up in India and RBI has accumulated reserves of 600bn now and prevented rupee from rising. Now with all the inflows coming into India, I feel INR has very low chances of weakening. Also consider all the regulations and tech crackdown in China, there is going to be incremental allocation to India. Even crude oil prices rising doesnt sound like a challenge now in this backdrop.

      So to summarize, either invest your SGD here in ETFs, roboadvisors or unit trusts or just send money to India and invest there in bond funds or slowly keep adding into Nifty index fund. You need to keep investing. Holding cash in SGD is the worst thing to do.

      Like

  39. Hi ,

    Want to send 30k India, is this still good time? Seeing downtrend since two weeks.

    Can it reach 55.50 by near august?

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    1. Hi

      Markets are unpredictable with political and pandemic risk. It could go to 55.5 or fall down to 54 as well. You can transfer in small tranches to average out your rate.

      Like

  40. Hi Aditya
    Any views on SGD — > INR movement for next 2 months. Any reason for sudden strength of INR?
    Thank you

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    Reply

    1. Hi Reddy
      It just might be RBI selling dollars to manage some upcoming outflows. Any strength in rupee should be temporary. If SGD INR goes towarda 54 in a knee jerk reaction then great opportunity to bring money back from India. With Covid cases rising in rest of South East Asia, Singapore and sgd is a safe haven.
      Cheers

      Like

    2. I transfered all my SGD to India as this was exactly what I was fearing. In Singapore keeping SGD is always a dilemma, you need to invest it you cannot just keep it. In India, you can keep in NRE FDs, bond funds and make decent gains. In Singapore, if you invest in SGD bond funds you dont make a lot of money and if you retirement plan is in India, you will always be worried about the fx risk. So, I found moving money to India and managing from India perspective is more of a peace of mind for me. But going forward any new SGD I accumulate I am planning to invest through IBKR in global equity ETFs and India money I will invest in India mutual funds systematically.

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  41. I think we should just accumulate SGD now, RBI is kind of like trading it up and down to make gains and pass it as dividend to govt. So we should also do the same. Accumulate SGD while SGDINR < 57 and transfer to India once the level gets crossed. I think by year end we should see 57 again.

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    1. I agree, nre deposits are not as attractive as they used to be. I think if one can generate 4-5% return in sgd denominated assets it will easily beat the exchange adjusted nre deposit returns. If inflation really comes true then cyclical mutual funds should do well and so do banks. They usually go up when interest rates go up. Even if Japan and EU get to zero rate instead of negative that will be a big boost to banks profitability.

      Liked by 1 person

    2. Thanks Aditya. How do we invest in gsec in SGD? i guess you mean, convert SGD to INR and invest in gsec in india? Or is there any option to invest in SGD on gsec?

      Like

    4. hi Aditya, Nitin,
      in the current scenario, do you still advise accumulating SGD? what are the suggestions to generate 4-5% return on SGD assets as given in the comment?
      Thanks,
      Andy

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    5. Hi Andy, if you are a PR or a citizen moving money to SA under Cpf is the safest 4% return you can get. However, for us regular folks 4-5% of SGD returns do come with higher risks. Equity investments are great but you need a fairly long horizon. Indian gsecs i think are a good choice with very little risk and over a period of time will earn atleast 4-5% in SGD terms. I expect the yield on gsec to touch 7.5-8% fairly soon

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  42. I just got this email from HDFC “We wish to inform you that our online remittance service through Quickremit for money transfer from Singapore to India will be discontinued after 30th June 2021 due to changes in regulatory guidelines.”

    What regulatory guidelines are they talking about and why only Singapore? I dont use HDFC quickremit, but I was planning to use ICICI Money2India, as they have a new NRI remittance permia account, where you can maintain zero balance account, as long as you remit 10k USD worth in a year.

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  44. Looks like RBI has sold more dollar to prop up rupee. I think that a short term top of 56.8 was achieved 2 days back. Unless, covid goes worse in India (which I hope and pray it does not) the pair should settle back between 55.5 – 56

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  45. Hi All,

    I found another transfer provider called Remitly which also gives spot rate but the fees seems to be fixed per transfer, which is like $4! 1st transfer is free. But they have limits on how much you can transfer. You can verify by submitting documents and your limit will be increased to 90k per month, without verification it is only 15k per month.

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    2. Hi Aditya, they are registered with MAS as well but it is a mainly a global player registered in US and many other places.

      Like

    6. Hi Reddy, when I tried to do transfer it showed me the spot rate with no fees for even 20k, so I thought there is no limit of 1k. But I didn’t go through with the transaction. Also I didn’t find any way of locking the transaction. So you maybe right that wise.com is the best.

      Like

  48. MAS has made no changes to the monetary policy but have increased the inflation forecast slightly. This should result in USD SGD moving to 1.33 and SGD INR inching closer to 56.5. Watch closely if you are looking to transfer money to India

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    3. Roller coaster continues… Sharp drop from 56.35 to 55.80 now. Could it really follow the image. Go back to 54 quickly?

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