Singapore’s central bank devalued its currency less aggressively than expected in a monetary policy review yesterday, signaling growing confidence that the global economy is bottoming out.
The Monetary Authority of Singapore repeated what it had done in previous downturns in 2002 and 2003 by shifting the center of the secret trade-weighted band for the Singapore dollar down to the existing level of the exchange rate basket, effectively a devaluation.
Based on their estimates of the policy band the Singapore dollar is managed in, economists said the currency might have been devalued by 1.5 percent to 2 percent.
PHOTO: AFP
Yesterday’s monetary easing came as Singapore’s economy contracted a record 11.5 percent from a year earlier in the first quarter of this year, more than a market median forecast of an 8.8 percent slump. The government expects the economy to shrink between 6 percent and 9 percent this year.
The bank said the economy is likely to remain below its potential growth rate until a decisive recovery in exports.
The policy easing appeared inadequate to most analysts. JPMorgan Chase strategist Claudio Piron said the Monetary Authority of Singapore had been conservative.
“There had been some expectation that the re-centering would be as much as a 400 basis points depreciation,” he said.
Others pointed to subtle hints of optimism in the central bank’s statement, such as the allusions to Singapore’s “sound fundamentals,” and references to a pick up in leading indicators and improved consumption in the US.
“The statement was somewhat optimistic with the usual dose of cautiousness,” said Emmanual Ng, strategist at OCBC Bank.
Other data yesterday meanwhile suggested Singapore’s open economy — exports including re-exports are double the total economic output — could be nearing a trough.
Non-oil exports (NODX) fell 17 percent from a year earlier last month after a record 35 percent plunge in January and a 24 percent fall in February. Shipments to China jumped 14 percent last month.
“Although we are seeing some faint heartbeats in the Singapore economy with better-than-expected March NODX numbers, we have not seen the bottom yet,” said Song Seng Wun (宋誠煥), economist at Malaysian bank CIMB in Singapore. “With inflation easing and external demand fragile, the shift in policy remains appropriate.”
“Given all these horrendous numbers, this policy change is not a big surprise. It is reflecting the free fall in external demand,” Song said.
The Singapore dollar, which has been emerging Asia’s second-worst performing currency this year, strengthened to a two-month high of S$1.497 against the US dollar from S$1.515 before the announcement, and was trading at S$1.5005 by 0600 GMT.
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
Taiwan was ranked the fourth-safest country in the world with a score of 82.9, trailing only Andorra, the United Arab Emirates and Qatar in Numbeo’s Safety Index by Country report. Taiwan’s score improved by 0.1 points compared with last year’s mid-year report, which had Taiwan fourth with a score of 82.8. However, both scores were lower than in last year’s first review, when Taiwan scored 83.3, and are a long way from when Taiwan was named the second-safest country in the world in 2021, scoring 84.8. Taiwan ranked higher than Singapore in ninth with a score of 77.4 and Japan in 10th with
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary
RSS