Question by bazbsg: why is the Singapore dollar so strong?
When I look at what it costs to buy things in Singapore (SG) in SG dollars and compare that to what it costs to buy similar things in the USA with US dollars, I wonder why the exchange rate of the SG dollar is so strong. Housing, cars, groceries, restaurants, hotels, electronics all cost more in SG. I would have thought the exchange rate was basically a matter of the cost of goods in the different currencies. What other factors affect the exchange rate between currencies in general and what factors are making the SG dollar so strong in general?

Best answer:

Answer by Sandy
Housing and cars are two things in Singapore you cannot compare to other countries. Because of its extremely small size, Singapore is very short of land, but the population is growing, so the property prices keep rising, which means that as time goes by, only the rich can afford private housing. About 75% of the population live in government subsidised housing. Also due to the lack of land space coupled with a dense population, the roads are clogged with traffic jams, so the govt slaps a very heavy charge to own a car, trying to drive down the car population. It costs a lot less to buy the same house or car in the US.

However other things are relatively cheap, like electronic goods and food (apart from expensive restaurants).

As to the exchange rate, perhaps this article would help:

http://community.nasdaq.com/News/2010-10/currency-wars-reach-singapore.aspx?storyid=42477

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