To The Moon

Amid ongoing global economic uncertainty, the Singapore dollar (SGD) has shown remarkable resilience. Just last week, the SGD surged to 5.5634 against the Chinese Yuan (RMB)—its strongest level since 1997—and also touched a five-month high against the U.S. dollar. While such headlines often grab attention, many Singaporeans might ask: Does this actually impact me in daily life?

In theory, a stronger SGD has plenty of upsides. For one, it increases purchasing power when converting to foreign currencies. That means buying overseas stocks, investing in foreign ETFs, or even traveling abroad becomes more cost-effective. If I wanted to invest in the U.S. stock market, for example, converting SGD to USD at a favorable rate means I can potentially get more shares for the same amount of money. Likewise, for those planning overseas holidays, their travel budget might now stretch a bit further—from hotel stays to shopping sprees.

But personally? The impact feels quite limited at the moment.

I used to convert SGD to other currencies more frequently to invest in international markets. But given how volatile the global stock markets have been lately, I’ve become more cautious. These days, I usually buy foreign stocks less often than before. I also haven’t had the time to go on overseas trips, so the travel-related benefits of a strong SGD don’t apply to me right now either.

Instead, I’ve shifted my financial focus towards stable and longer-term options. With local deposit rates declining, I've been paying more attention to my CPF Special Account (SA). The interest rate is relatively high and stable, and it feels like a safer option in times like these. Of course, topping up the SA has its drawbacks—chiefly the fact that the funds are locked in until a certain age. But for someone who already has sufficient emergency cash, investments in stocks and ETFs, and even some holdings in Singapore Savings Bonds, it feels like a fair trade-off.

While I may not immediately “feel” the benefits of a stronger SGD in my day-to-day spending, it does shape how I think about capital preservation vs. growth, and how I allocate my money. The stronger currency makes me more comfortable holding onto SGD-denominated assets—especially since the exchange rate strength can help mitigate inflationary pressures from imported goods and services, even if indirectly.

More Subtle Impacts of a Strong SGD

For those who do more cross-border transactions—like paying for overseas education, buying from foreign online retailers, or investing internationally—the effects of a stronger SGD are more tangible. But even for others, the impact still trickles through the economy. For instance:

• Cheaper imports: A strong SGD can help reduce the cost of imported goods, which could ease inflation a little.

• Retail pricing: Global brands operating in Singapore might pass on some of the cost savings to consumers.

• Travel: When you go overseas, a strong SGD means your money will stretch further. Expenses like food, accommodation, and shopping may feel more affordable compared to when the exchange rate was less favorable.

Final Thoughts: Strength Isn’t Always Loud

A strong Singapore dollar doesn’t always show up as a loud change in our wallets—but it does quietly shape the economy, from imported goods to how we plan our finances. For me, it reinforces the importance of balance—staying diversified, maintaining liquidity, and taking advantage of opportunities that align with both global trends and personal life stages.