Despite a double-digit decline in Singapore’s non-oil exports, the country’s trade surplus widened further. After falling by double digits in January, imports recovered slightly in February. As the trade report was released, the USD/SGD exchange rate went down marginally.
According to data gathered by Enterprise Singapore, exports fell by 15.6% in February, following a massive 25% drop in January. This drop affected all of the top 10 export destinations and was widespread across all important exports.
The major contributor to the drop was the decrease in exports to the European Union, Hong Kong, and Taiwan. Exports peaked in November 2021 and have since been steadily declining. On a year-over-year basis, though, they are still hovering just above the 3-month moving average.
The total value of Singapore’s non-oil domestic exports (NODX) in February was S$13.3 billion, down from S$17.5 billion in the corresponding month in 2022. This figure was also lower than the average monthly export total for the country.
During the same time frame, NORI (imports minus exports) decreased by S$0.8 bn, from S$4.7 bn to S$3.9 bn. In contrast, Singapore’s imports in the same month of 2022 amounted to roughly S$6.6 billion. Since August of last year, when they were above S$8 billion, these imports have been steadily declining. Although Chinese demand has remained relatively modest, Singapore’s economy has slowed in recent months. The Singapore dollar is still one of the best-performing emerging market currencies.
As of Friday’s trade, the USD/SGD exchange rate stood at 1.3421, 7.47% below its 2022 high. The Singapore dollar is one of the best performing currencies in both the developing and advanced economies, and its value against the US dollar has climbed by 2.85 percent from its yearly low.
Exports are affected by the rising Singapore dollar. Countries that rely heavily on exports typically want a weaker currency because it makes their products more competitive on international markets.Singapore’s success can largely be attributed to its status as a credible alternative to Beijing-friendly Hong Kong.
