The Singdollar has strengthened 6% to 7% against a weakening US dollar in 2025 – the strongest year-to-date performance in the last 20 years. — Reuters
SINGAPORE: The strength of the Singapore dollar against the greenback is providing significant financial relief to parents whose children are studying in the United States and holidaymakers headed there during the June school holidays.
The Singdollar has strengthened 6% to 7% against a weakening US dollar in 2025, the strongest year-to-date performance in the last 20 years.
It has been trading recently largely below 1.3 to one US dollar – as low as around 1.28. It reached a 10-year high against the US dollar in 2024 when it hit 1.28.
This means every Singdollar sent to cover tuition, accommodation and living expenses buys more US dollars than before.
“This reduction in costs can alleviate some of the financial burden, allowing parents to allocate resources towards other aspects of their children’s education or travel within the United States,” said Christopher Wong, a foreign exchange (forex) strategist at OCBC Bank.
A Singaporean parent paying a US$30,000 annual tuition fee would have needed S$40,500 at the start of 2024 when the exchange rate was closer to 1.35 Singdollars to one US dollar. With the exchange rate at 1.28, the same tuition now costs around S$38,400 – a saving of S$2,100.
The weakening of the US dollar against the Singdollar has also been a boon for Singaporean holidaymakers, who will find their travel budgets stretching further in the United States.
Accommodations, dining and entertainment options can potentially be less expensive, provided that US merchants do not raise prices, Wong said.
One avid Singaporean traveller said he is even considering luxury safaris and tours to exotic places like Antarctica, where prices are often quoted in US dollars, as they have become more affordable.
A Singaporean homemaker who buys American arts and crafts supplies is happy as she now coughs up less for her hobby.
Beyond families enjoying reduced education costs and greater purchasing power overseas, the effect of a firmer Singdollar is also felt elsewhere – by importers and exporters to inbound visitors.
A Filipino tourist, who recently visited Singapore to attend American pop star Lady Gaga’s concert, said it was an expensive holiday for him.
Since the start of 2025, the Philippine peso has lost some ground against the Singdollar. He had to exchange about 43.13 pesos for one Singdollar. This compares with January 2024, when he needed 41.95 pesos to get one Singdollar.
The stronger local currency against the US dollar has been mixed in its impact on businesses and their customers.
Typically, it should benefit companies with big expenses in US dollars. These include airlines, which spend about 30% of their expenses on US dollar-traded jet fuel.
However, in the case of Singapore Airlines, its hedging policies would result in a negative S$1.6 million impact on its pre-tax profit for every 1% strengthening of the Singapore dollar against the US currency, according to its financial year 2024 annual report.
Meanwhile, the chief executive officer of a Singapore-based building materials company said it has benefitted him as he imports raw materials in US dollars.
However, some of his Asean customers are feeling the pain as he sells his products in the Singdollar.
“Export-oriented businesses in Singapore may face challenges as the US dollar weakens against the Singdollar,” Wong said.
“A stronger Singdollar can make Singaporean exports more expensive for foreign buyers, potentially reducing demand for our goods in international markets.”
Underpinning the Singdollar is its appeal as a safe haven, especially in an uncertain environment as a result of the US tariff wars, Singapore’s solid fundamentals and a softer US dollar trend as investors shy away from US assets. — The Straits Times/ANN
