In case you didn’t already know, the Singapore Dollar (SGD) is currently enjoying very favorable exchange rate against many other popular foreign currencies, besides the US Dollar (USD).
This is likely a result of the Monetary Authority of Singapore (MAS) intentionally choosing to strengthen the SGD to help Singapore cope with worldwide inflation. A stronger SGD means that overseas imports will become cheaper, in SGD terms.
This also means that as Singaporeans, travelling and spending money overseas will also become cheaper. And this is good news for many travel-starved Singaporeans who may wish to travel soon and want to stretch their SGD to the fullest.
The problem with leisure travelling is that often, many of us would only change for the foreign currencies that we need at the point we are travelling. This naturally leads to a search for moneychangers with the best exchange rate.
However, to enjoy a favorable foreign currency exchange rate, it’s not always about where you exchange your foreign currencies conversion at, but rather when you do the conversion.
For example, those of us who travel to Japan often will be used to the SGD/JPY rate hovering between 70 to 80. However, in September 2022, the SGD strengthened significantly against the Japanese Yen (JPY) and the SGD/JPY rates are now at about 100 (1 SGD to 100 JPY). For Singaporean looking to travel to Japan in the next few months, this is a very favorable rate if we can secure it.
What If The SGD Continues To Strengthen Against The Yen?
The common question that may have is what makes us so sure that the SGD wouldn’t continue strengthening against the Yen?
The truth is that nobody would know.
If the SGD continues strengthening and the SGD/JPY hits 110 by year-end, then those who exchange their currency at the current 100 level would have lost out. If the rates drop to 90, then those who did the SGD/JPY conversion at 100 would benefit.
The point is that if you think the current rates are favorable, then it would make sense to do a little hedging for your future travel by exchanging some SGD to JPY today, as opposed to speculating that rates would be superior, or to accept whatever the spot rate is at the point in time of your travel.
Nobody can predict where rates will be in 3 months or 6 months from now, so we are not going to attempt to guess. You can take reference to the historical rate below and decide for yourself.
The caveat here is that you must be confident that you are intending to travel. If you don’t end up travelling to Japan, or whatever country that you are looking at, then all you are doing is speculating on the forex rate.
Do We Need To Exchange For Physical Foreign Currencies?
The good thing about our increasingly digital world is that physical currencies are no longer always necessary. As long as credit card payments are accepted, we can use multi-currency wallets like YouTrip to exchange the desired currencies that we want at a rate that is favorable to us, and to pay using our personal YouTrip Mastercard in over 150 currencies.
The good news is that the Japanese Yen (JPY) is one of ten currencies that we can hold in our YouTrip multi-currency wallet. This means if we have JPY in our multi-currency wallet and pay through our YouTrip Mastercard, the JPY will automatically be deducted from our YouTrip multi-currency wallet.
Of course, there might still be traditional places in Japan where it could be more convenient to pay using physical currency. Hence, it may not be a bad idea to also have a little Yen as cash on hand.
If you are interested, you can also hold the HKD, NZD, GBP, EUR, AUD, USD, CHF and SEK in your YouTrip wallet. So, if you are intending to travel to any country using the following foreign currencies, the same logic applies.
At the point in writing, the EUR/SGD is at 1.39 (1 Euro = 1.39 SGD), GBP/SGD is at 1.55 and the SGD/NZD is at 1.22 (1 SGD = 1.22 NZD).
Enjoy Favorable Rates With YouTrip
While being able to lock-in favorable rates in advance is good, we also want to ensure that we enjoy the best possible conversion rates without any markups.
The good news is that YouTrip doesn’t charge any currency conversion fees. This is unlike traditional moneychangers and financial institutions, where currency conversion fees and foreign exchange spread are how they make money. So the rates that you enjoy from YouTrip will likely be quite similar to the spot rate.
At the point in time of writing, the ‘Google rate’ we saw was 1 SGD to 100.19 JPY while YouTrip was offering us 1 SGD to 99.75, or about 0.4% lower.
DollarsAndSense Exclusive: Use the promo code “DNS5″ during your YouTrip registration to receive a welcome credit of $5 in your YouTrip account.
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