<TABLE id=msgUN cellSpacing=3 cellPadding=0 width="100%" border=0><TBODY><TR><TD id=msgUNsubj vAlign=top>Coffee Shop Talk - Worst slump in 7 years for S$</TD><TD id=msgunetc noWrap align=right>
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Worst slump in 7 years for S$
THE Singapore dollar has seen its biggest monthly drop in seven years, after reaching a record high in July, as concerns about a slowing economy spurred traders to bet that the Monetary Authority of Singapore (MAS) will rein in currency gains. .
The Singapore dollar slumped against the US dollar this month as the Government cut its 2008 growth forecasts for exports and growth and reported that inflation slowed from a 26-year high in July. In April, the MAS announced a one-off strengthening of the currency to help combat inflation and is scheduled to review the policy in October. But this has had the negative side-effect of making Singapore’s exports comparatively more expensive. .
“We think there’s a good chance that they will change the policy in October though not as aggressively as some are expecting,” said Royal Bank of Scotland strategist Chia Woon Khein. “They might moderate the pace of appreciation, not shift to a neutral stance.” .
In late Asian trade, the Singapore dollar traded at $1.4143 against the US dollar.It’s lost 3.32 per cent against the greenback since the end of July, the largest monthly decline since a 3.39-per-cent slide in March 2001. The Singapore dollar reached a record $1.3450 on July 16. .
Ms Chia forecasts the Singapore dollar will fall a further1 per cent in the next one or two months .
The MAS’ policy is to guide the dollar within an undisclosed band against a basket of currencies belonging to major trading partners. .
It adopted a faster pace of appreciation at its October meeting last year to help curb inflation, which has since slowed to 6.5 per cent in July from 7.5 per cent in each of the previous three months. Bloomberg
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Worst slump in 7 years for S$
THE Singapore dollar has seen its biggest monthly drop in seven years, after reaching a record high in July, as concerns about a slowing economy spurred traders to bet that the Monetary Authority of Singapore (MAS) will rein in currency gains. .
The Singapore dollar slumped against the US dollar this month as the Government cut its 2008 growth forecasts for exports and growth and reported that inflation slowed from a 26-year high in July. In April, the MAS announced a one-off strengthening of the currency to help combat inflation and is scheduled to review the policy in October. But this has had the negative side-effect of making Singapore’s exports comparatively more expensive. .
“We think there’s a good chance that they will change the policy in October though not as aggressively as some are expecting,” said Royal Bank of Scotland strategist Chia Woon Khein. “They might moderate the pace of appreciation, not shift to a neutral stance.” .
In late Asian trade, the Singapore dollar traded at $1.4143 against the US dollar.It’s lost 3.32 per cent against the greenback since the end of July, the largest monthly decline since a 3.39-per-cent slide in March 2001. The Singapore dollar reached a record $1.3450 on July 16. .
Ms Chia forecasts the Singapore dollar will fall a further1 per cent in the next one or two months .
The MAS’ policy is to guide the dollar within an undisclosed band against a basket of currencies belonging to major trading partners. .
It adopted a faster pace of appreciation at its October meeting last year to help curb inflation, which has since slowed to 6.5 per cent in July from 7.5 per cent in each of the previous three months. Bloomberg
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