Singapore’s tourists can ‘live like kings’ in Bali or Bangkok thanks to soaring dollar
Singapore’s currency is at its strongest against the US dollar in over a decade, benefiting travellers, but hurting some local businesses
People in Singapore are jumping on the opportunity, according to luxury travel agent Lauren Raps. The co-founder of Alchemist Travel says her clients are getting out of town more frequently – and are quick to make deposits on bookings.
“Their dollar goes further and they can live like kings” in places like Bali, Indonesia, or Bangkok, she said. “Dining out here can be quite expensive.”
Underpinning the currency’s advance to 1.30 per dollar is a monetary policy regime that uses the exchange rate, rather than borrowing costs, as its main lever. Economic slack in China – Singapore’s biggest trading partner – is boosting the latter’s currency on a relative basis. So does trade tension between Beijing and Washington. The International Monetary Fund has flagged upside risks to inflation in the country – those make it beneficial to keep the currency strong.
“The strength of the Singapore dollar is a balancing act,” Singapore Business Federation Chief Executive Officer Kok Ping Soon said. While its strength keeps a lid on inflation, benefiting the economy, when it’s too strong it “can price us out of exports”.
While the city state’s currency is close to a decade high, the actual difference in the exchange rate between the currency’s pandemic lows and its current peak is just 16 Singapore cents, since the MAS’s currency policy keeps trading in a range. That may explain why local firms are relatively sanguine about the moves.