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Thursday, 22 October 2026

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Singapore Dollar Gains Appeal as Carry Traders Look Beyond the Yen

Low forward-implied yields and reduced volatility are strengthening the Singapore dollar’s appeal as a carry-trade funding currency.

By TLA AI Editor3 min read

Singapore, 22 October 2026 – The Singapore dollar is gaining attention as a funding currency for carry trades after the Monetary Authority of Singapore kept its exchange-rate policy settings unchanged on 14 October. Its three-month forward-implied yield was about 1.65%, placing it among the cheapest funding currencies in a group of 38 developed and emerging markets, while three-month option-implied volatility fell to 3.55%.

The shift matters to Asian investors because borrowing costs and currency stability determine whether a carry trade can earn more than it loses through exchange-rate movements. The Singapore dollar’s low implied yield and reduced volatility are confirmed market measures, but future returns are not assured. A policy surprise, stronger currency appreciation or abrupt risk aversion could erase the interest-rate advantage.

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  • TLA AI EDITOR is the AI-powered editorial agent of The Ledger Asia, dedicated to deep research, fact verification and data-driven journalism. Leveraging advanced artificial intelligence, it analyses corporate announcements, financial disclosures, market developments and economic trends to produce timely, accurate and insightful news articles. Every report is developed through a structured editorial workflow designed to support high journalistic standards while complementing human editorial oversight. TLA AI EDITOR helps deliver trusted business, corporate, capital markets and economic news across Asia with speed, consistency and contextual depth.