The Question is ~ What will they do on Thursday, April 14th ~ Revalue or Steepen Trading Band?
Snip ~ The Monetary Authority of Singapore will re-center the band in which the city-state’s dollar is allowed to trade against a weighted basket of currencies on April 14, the analysts said.
April 11, 2011
Singapore to Revalue Currency or Steepen Trading Band, Survey S
Singapore will revalue its currency to tame inflation that exceeded the government’s target in February, joining other Asian central banks in tightening monetary policy, predict 10 of 20 analysts surveyed by Bloomberg.
The Monetary Authority of Singapore will re-center the band in which the city-state’s dollar is allowed to trade against a weighted basket of currencies on April 14, the analysts said.
Six forecast no change from the “modest and gradual appreciation” stance adopted in the last policy meeting in October. Four expect faster gains in the currency will be achieved through a steepening of the band.
“Inflationary pressures should still dominate,” said Chow Penn Nee, an economist at United Overseas Bank Ltd. in Singapore. “A one-off shift at first might seem to be a more aggressive tightening measure, but over time the Singapore dollar doesn’t necessarily have to appreciate owing to the uncertainty of economic growth.”
Singapore’s dollar rose 0.1 percent to S$1.25562 against its U.S. counterpart as of 2:04 p.m. local time, bringing gains this year to 2.1 percent, the fourth-best performance in Asia, according to data compiled by Bloomberg. It reached S$1.25517 earlier, the strongest level since at least 1981 when Bloomberg began tracking the data. The currency climbed 9.3 percent last year, its best performance since 1994, after the central bank unexpectedly tightened policy at both of its biannual reviews.
Median Estimates
The monetary authority uses the exchange rate rather than borrowing costs to conduct monetary policy, adjusting the pace of appreciation or depreciation against an undisclosed trade- weighted band of currencies by changing the slope, width and centre of the band. A steeper slope allows faster appreciation over time, while lifting the band’s midpoint amounts to a one- off revaluation. Policy makers revalued the currency last April and steepened the slope in October.
Consumer prices rose 5 percent in February from a year earlier, after a 5.5 percent gain in January that was the most since 2008, according to official data released March 23. Prices may advance by up to 4 percent this year, compared with an earlier forecast of no more than 3 percent, Prime Minister Lee Hsien Loong’s government predicted Feb. 17.
China, India, Indonesia, South Korea, Taiwan, the Philippines and Thailand have all raised interest rates this year to slow inflation caused by rising fuel and food prices.
Economic growth may ease to 4 percent to 6 percent this year, after a record expansion of 14.5 percent in 2010, the government forecast in February.
The Singapore dollar will strengthen 0.4 percent by midyear to S$1.25 and 2.9 percent by year-end to S$1.22, according to the median estimates of the 20 analysts.
http://www.bloomberg.com/news/print/2011-04-10/singapore-central-bank-will-revalue-currency-or-steepen-band-survey-shows.html
Snip ~ The Monetary Authority of Singapore will re-center the band in which the city-state’s dollar is allowed to trade against a weighted basket of currencies on April 14, the analysts said.
April 11, 2011
Singapore to Revalue Currency or Steepen Trading Band, Survey S
Singapore will revalue its currency to tame inflation that exceeded the government’s target in February, joining other Asian central banks in tightening monetary policy, predict 10 of 20 analysts surveyed by Bloomberg.
The Monetary Authority of Singapore will re-center the band in which the city-state’s dollar is allowed to trade against a weighted basket of currencies on April 14, the analysts said.
Six forecast no change from the “modest and gradual appreciation” stance adopted in the last policy meeting in October. Four expect faster gains in the currency will be achieved through a steepening of the band.
“Inflationary pressures should still dominate,” said Chow Penn Nee, an economist at United Overseas Bank Ltd. in Singapore. “A one-off shift at first might seem to be a more aggressive tightening measure, but over time the Singapore dollar doesn’t necessarily have to appreciate owing to the uncertainty of economic growth.”
Singapore’s dollar rose 0.1 percent to S$1.25562 against its U.S. counterpart as of 2:04 p.m. local time, bringing gains this year to 2.1 percent, the fourth-best performance in Asia, according to data compiled by Bloomberg. It reached S$1.25517 earlier, the strongest level since at least 1981 when Bloomberg began tracking the data. The currency climbed 9.3 percent last year, its best performance since 1994, after the central bank unexpectedly tightened policy at both of its biannual reviews.
Median Estimates
The monetary authority uses the exchange rate rather than borrowing costs to conduct monetary policy, adjusting the pace of appreciation or depreciation against an undisclosed trade- weighted band of currencies by changing the slope, width and centre of the band. A steeper slope allows faster appreciation over time, while lifting the band’s midpoint amounts to a one- off revaluation. Policy makers revalued the currency last April and steepened the slope in October.
Consumer prices rose 5 percent in February from a year earlier, after a 5.5 percent gain in January that was the most since 2008, according to official data released March 23. Prices may advance by up to 4 percent this year, compared with an earlier forecast of no more than 3 percent, Prime Minister Lee Hsien Loong’s government predicted Feb. 17.
China, India, Indonesia, South Korea, Taiwan, the Philippines and Thailand have all raised interest rates this year to slow inflation caused by rising fuel and food prices.
Economic growth may ease to 4 percent to 6 percent this year, after a record expansion of 14.5 percent in 2010, the government forecast in February.
The Singapore dollar will strengthen 0.4 percent by midyear to S$1.25 and 2.9 percent by year-end to S$1.22, according to the median estimates of the 20 analysts.
http://www.bloomberg.com/news/print/2011-04-10/singapore-central-bank-will-revalue-currency-or-steepen-band-survey-shows.html
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