Singapore unexpectedly eased monetary policy yesterday, sending the currency to the weakest since 2010 against the US dollar as the country joined global central banks in shoring up growth amid dwindling inflation.
The Monetary Authority of Singapore (MAS), which uses the exchange rate as its main policy tool, yesterday said in an unscheduled statement that it will seek a slower pace of appreciation against a basket of currencies. It cut the inflation forecast for this year, predicting prices may fall by as much as 0.5 percent.
The move was the first emergency policy change since one following the Sept. 11, 2001, terror attacks on the US for the MAS — which only has two scheduled policy announcements a year — reflecting how the plunge in oil prices has changed the outlook in recent months. Singapore becomes at least the ninth nation to ease policy this month, as officials from Europe to Canada and India contend with escalating disinflation and faltering global growth.
Photo: AFP
“They’re essentially trying to stay ahead” by moving before the scheduled April policy review, said Song Seng Wun, an economist at CIMB Research in Singapore. “We’ve already seen so many central banks cut. For Singapore to do such an unscheduled move, it has to be against the backdrop of enormous uncertainty.”
The Singaporean dollar fell 0.9 percent to S$1.3512 per US dollar as of 2:11pm in Singapore, the weakest since September 2010. The currency has fallen almost 6 percent against the US dollar in the past three months, the third-biggest loser among 11 most-traded Asian currencies tracked by Bloomberg.
The MAS will probably weaken the Singaporean dollar “quite solidly,” and the currency might drop to about S$1.4 against the US dollar by the end of March, said Tsutomu Soma, department manager of the fixed-income business unit at Rakuten Securities.
While the exchange rate has weakened against the US dollar, it has gained against the ringgit, euro and yen in the last three months, the central bank said.
“Since the last Monetary Policy Statement in October [last year], developments in the global and domestic inflation environment have led to a significant shift in Singapore’s CPI inflation outlook for 2015,” the MAS said. “The global economy continues to grow at an uneven pace” and falling oil prices have curbed inflation, it said.
Last month, Singapore’s consumer prices fell for a second month for the first time since 2009, according to data compiled by Bloomberg. The central bank cut its inflation forecast for this year to a range of minus-0.5 percent to 0.5 percent, from the October last year prediction of 0.5 percent to 1.5 percent.
Yesterday’s decision follows an unscheduled rate cut by India this month. The Monetary Authority of Singapore last eased policy in October 2011.
Contract chipmaker United Microelectronics Corp (UMC, 聯電) yesterday said it has signed a memorandum of understanding (MOU) with Polar Semiconductor LLC to collaborate on the production of 8-inch wafers in the US. The collaboration aims to strengthen 8-inch wafer manufacturing in the US amid Washington’s efforts to increase onshore manufacturing of semiconductors, contribute to supply chain resilience against shifting geopolitical dynamics, and ensure a secure domestic supply of power semiconductors critical to automotive, electric grids, robotic manufacturing and data centers, the companies said in a joint statement. Under the MOU, Polar and UMC will identify devices for Polar to manufacture at
TECH TITANS: Amazon’s latest chip joins Google in competing for the 90 percent market share held by Nvidia, which claims it is ‘a generation ahead of the industry’ Amazon Web Services (AWS) on Tuesday launched its in-house-built Trainium3 artificial intelligence (AI) chip, marking a significant push to compete with Nvidia Corp in the lucrative market for AI computing power. The move intensifies competition in the AI chip market, where Nvidia dominates with an estimated 80 to 90 percent market share for products used in training large language models that power the likes of ChatGPT. Google last week caused tremors in the industry when it was reported that Facebook-parent Meta Platforms Inc would employ Google AI chips in data centers, signaling new competition for Nvidia. This followed the release last month of
TARIFF TALKS: The US secretary of commerce is eyeing more than US$300 billion in investments and said Taiwan would train US workers, but Taipei has denied the latter US Secretary of Commerce Howard Lutnick said the US is expecting a large investment pledge from Taiwan in trade talks, while President William Lai (賴清德) listed areas that need improvement in order for projects to be completed. “We’re in the midst of discussions,” Lutnick said on Wednesday. “But the fact is, this administration’s goal is to bring semiconductor manufacturing to America.” Lai on Wednesday said Taiwan is supportive of US President Donald Trump’s goal of reindustrializing the US, including efforts to ramp up semiconductor production. Such a goal would require the US to reduce its reliance on Taiwan as a key source
Foxconn Technology Group (富士康科技集團) and Luxshare Precision Industry Co (立訊精密) plan to add millions of gaming devices to Vietnam’s annual output, according to documents they submitted to local authorities, reinforcing the country’s role in the global supply of game consoles. Vietnam assembles a variety of electronic products destined for foreign markets, including smartphones, computers and tablets. Information on its production of consoles is not public, but Foxconn EV Energy & Component (Vietnam) Co, a subsidiary of the Taiwanese manufacturer, has capacity to produce up to 4 million gaming devices in a factory in Northern Vietnam, according to a company document from
RSS