Singapore Dollar To Us Dollar Exchange Rate History
The Singapore dollar (SGD) is the official currency of Singapore, while the US dollar (USD) is the official currency of the United States. The exchange rate between these two currencies has fluctuated over the years, affected by various economic and political factors.
Early History (1967-1985)
When Singapore gained independence in 1965, the currency used was the Malaysian dollar. However, in 1967, Singapore decided to issue its own currency, the Singapore dollar, which was pegged to the US dollar at a rate of 2.00 SGD to 1 USD. This peg remained in place until 1985, during which time the exchange rate between the SGD and USD was relatively stable.
Float and Re-Peg (1985-1998)
In 1985, Singapore decided to allow its currency to float against other currencies, including the US dollar. This meant that the exchange rate between the SGD and USD started to fluctuate more, depending on market forces.
However, in 1998, Singapore decided to re-peg its currency to a basket of currencies, including the US dollar. This was done in response to the Asian financial crisis, which had caused the SGD to depreciate significantly against the USD. The new exchange rate was set at 1.73 SGD to 1 USD.
Current Peg (1999-Present)
Since 1999, the exchange rate between the SGD and USD has remained relatively stable, thanks to Singapore's policy of maintaining a managed float. Under this policy, the Monetary Authority of Singapore (MAS) adjusts the exchange rate by buying or selling SGD in the foreign exchange market, in order to keep the exchange rate within a certain band.
As of August 2021, the exchange rate between the SGD and USD stands at around 1.35 SGD to 1 USD, meaning that one US dollar can be exchanged for approximately 1.35 Singapore dollars.
Factors Affecting the Exchange Rate
Several factors can affect the exchange rate between the SGD and USD, including:
- Economic growth: if Singapore's economy is growing faster than that of the US, demand for SGD may increase, causing its value to appreciate relative to the USD.
- Interest rates: if Singapore's interest rates are higher than those in the US, investors may be more likely to invest in SGD-denominated assets, leading to an increase in the demand for SGD and a corresponding increase in its value relative to the USD.
- Inflation: if Singapore's inflation rate is higher than that of the US, its exports may become less competitive, leading to a decrease in demand for SGD and a corresponding decrease in its value relative to the USD.
- Political stability: if Singapore is perceived as politically stable, foreign investors may be more likely to invest in SGD-denominated assets, leading to an increase in demand for SGD and a corresponding increase in its value relative to the USD.
Conclusion
The exchange rate between the Singapore dollar and US dollar has gone through several phases over the years, from a fixed peg to a managed float. Today, the exchange rate is relatively stable, thanks to Singapore's policy of maintaining a managed float. However, various economic and political factors can still affect the exchange rate, making it important for individuals and businesses to stay informed about the latest developments.