Why is the S'pore dollar plunging?

[scroobal]

The SGD vs other currencies does not operate like other forex pairs in the world. MAS uses a basket of currencies and operates within a tight band that it sets. In view of the gov't extensive control of the economy and funds, it is able to set the rate according to its needs.

If it depreciates, it means the whole raft of possibilities - need to local exports to rise, no need to increase capital expenditure, not time yet to renew overseas base leases, no major arms purchases expected etc.

No economist who is familiar with Singapore will read the world or any other economy to determine SGD. In view of it small size, its control and it access to foreign reserves, MAS can swing the SGD in anyway they like every day of the week and every week of the year. Just track the US/AUD, AUD/SGD & US/SGD pairs and you know there is no correlation when its comes to SGD. But you can identify the band that MAS has given SGD vs the others.

I just chuckle when I see comments based on extensive research based on some foreign movement.

Interestingly I don't see any other currency in such a position.

 

[cass888]

The SGD vs other currencies does not operate like other forex pairs in the world. MAS uses a basket of currencies and operates within a tight band that it sets. In view of the gov't extensive control of the economy and funds, it is able to set the rate according to its needs.

If it depreciates, it means the whole raft of possibilities - need to local exports to rise, no need to increase capital expenditure, not time yet to renew overseas base leases, no major arms purchases expected etc.

No economist who is familiar with Singapore will read the world or any other economy to determine SGD. In view of it small size, its control and it access to foreign reserves, MAS can swing the SGD in anyway they like every day of the week and every week of the year. Just track the US/AUD, AUD/SGD & US/SGD pairs and you know there is no correlation when its comes to SGD. But you can identify the band that MAS has given SGD vs the others.

I just chuckle when I see comments based on extensive research based on some foreign movement.

Interestingly I don't see any other currency in such a position.

The Chinese Yuan will be, if not already, in such a position. With enough reserves to match the currency you have in circulation, you dictate how much your currency is worth.

 

[ahbengsong]

Euros have all along been rather stable. Like a bit too dormant. But I don't play currencies. I still prefer shares. :o

China seems a bit deflated these days. And with world dealing with inflation issues, seems very murky at this point of time

The SGD is tied to the USD in a way.... so as the USD weakens against the SGD... so does the SGD against the chinese yuan... the yuan has another 10~15% upside to the SGD... and the USD too... given the growing chinese foreign reserves...

 

[suteerak1099]

when the US econ slumped, our SGD also suffered strains. when the US econ continue to landslide, our very own GLCs r happily pumping tax payers $ into US finances. by acquiring those top losers on the charts, it also means we're incuring the bad debts n losing streaks... for as long as it shall continue sliding.

at the end of the day when the losses become paramount, they just conveniently cut losses, write them off... n biz carries on as usual.

 

[SammyHulk]

Maybe it's for gratifications of expressing 'views and opinions' or accurately venting disagreements and frustrations on their pet issue irregardless whether they are still in sg or overseas?

 

[scroobal]

The Chinese Yuan will be, if not already, in such a position. With enough reserves to match the currency you have in circulation, you dictate how much your currency is worth.

Yes, in view of its foreign reserves the Yuan has considerable leverage but it can't get into a band as any large scale move will result in other major currencies reacting quickly. It will be difficult to control it within a band. Its something that the Chinese has been trying to put their arms around as appreciation at that rate is not going to help anyone.

SGD is a nobody in the world of forex except that Singapore is major forex hub. It can dive, jump, go sideways and nothing will happen except for Singaporeans. The rich indon, Thais, Malaysians and other foreigners have acu accounts in Singapore denominated in the strong currencies such as USD, Euro etc.

 

[ccl69]

very chim leh...should have taken Econ class b4

 

[suteerak1099]

no need to be an econs guru to understand some issues ongoing. lemme give u a metaphor.

if u see your neighbors house on fire/ infested with termites, would u be keen to buy it over at depreciated price & live in it? even if u've the $ to demolish it n rebuild it, with heavy costs incurred, without knowing about the mkt situation after the reduilding is complete... would u or any1 in the right frame of mind be keen to buy it?

u see a tattered & torn ship, while the vessel owners have declared it to be no-longer sea worthy, without knowing if it'd suffer the same fate as titanic, would u be keen it over & take over operations of this possibly sinking ship?

u observe english BPLeague, wigan on a losing streak & very obvious to be relagated at the end of season, would u go to singaporepools to put your $ on them, as BPLeague champ??

bt the wierd thing is, they seem to enjoy pulling off all these high risk manouvers, without consideration. simply bcos its ah-kong's $$$. all we hear is they make moves to buy over under achieving assets, bt nothing mentioned when losses incurred, and/or remedy actions implemented to recover losses le.