Singapore allowed its currency to rise versus Greenback
Singapore allowed its currency to rise versus Greenback
04-14-2010 10:07
Singapore has allowed the Singapore Dollar to appreciate versus the Greenback. This measure targets on decreasing inflation and managing the economic expansion. The Singapore Dollar instantly rose 1.25% to 1.347 against the Greenback. The Monetary Authority of Singapore (MAS) lifted its inflation estimation from 2.5% to 3.5%. Singapore’s central bank stated that the economy grew by 32.1% on a yearly basis in the first quarter, in comparison to -2.8% in the preceding quarter.Singapore Dollar
There are also rumors that China will appreciate the Yuan in 2010. Markets expect that the appreciation of the Singapore Dollar may be followed by interest rate hikes in the other main exporting nations.Won – Ringgit
The Korean Won gained 0.85% and the Malaysian Ringgit jumped 1.05%. By revaluing the Singapore Dollar, the central bank aims on more control over the economic expansion and inflation.Inflationary pressures
A stronger rate of the Singapore Dollar makes the prices of foreign goods, services and investment options lower. Due to this, Singaporeans will spend more outside Singapore as the Singapore currency values more outside Singapore.Besides Singapore, there are more Asian economies that grow strongly and face inflationary pressures.
Chinese Yuan
Nevertheless, China is the largest exporter in Asia and prefers to go slow with regard to revaluing the Yuan. Other nations in the region also face pressure to preserve their low currency rates to maintain competitiveness, according to market watchers.Monetary Authority of Singapore
The Monetary Authority of Singapore allows the rate of the Singapore currency to range within a fixed exchange rate band. It stated that it had adapted a policy of ‘modest and steady revaluation’. The MAS meets only twice a year to determine exchange rate policy.
