Friday, July 22, 2011

Managing Money Matters

Bloomberg screamed "Singapore Central Bank Posts Record Loss" - the Monetary Authority of Singapore has posted a record loss of S$10.9 billion ($9 billion) in the year through March. "We made good investment gains but when measured in the Singapore dollar, these gains were more than offset by the strength of the currency,” was the way Managing Director Ravi Menon explained the second loss in the central bank’s 40-year history. A net loss of S$9.2 billion was reported in the year through March 2009.

MAS uses the exchange rate instead of interest rates to control monetary policy, and "finance our imports from the rest of the world and safeguard the value of our currency". Further appreciation is expected in April to tame price gains again, the third monetary policy tightening in a year. With each intervention in the open market to boost the Singapore dollar, which sources say is a daily event, the central bank’s equity investments in U.S. dollar terms will be further eroded by each exercise. Make that our hard earned savings are diminished by each masochistic exercise.

Whatever imported inflation MAS is targeting at seems to provide no visible relief to the common man. The same MAS is revising it's inflation forecast from 3~4 percent upwards to 4~5 percent, blaming "global inflationary prices". Isn't the strong Singapore dollar, which has appreciated 11 percent in the year through March, supposed to address these factors? The hard reality is that a strong currency is useless when the major bugbears are accommodation and transport costs, in particular the local inventions like COV (cash-over-valuation) and COE charges. If the price of oil imports is neutered at all by the currency moves, it sure as hell is not passed down to the layman in his electricity and transportation bills.

Menon claims from his ivory tower, "A strong Singapore dollar has helped, not just by filtering oil and food price increases, but also by providing a restraining effect on the economy." All we see at ground level is bus and train companies using oil price as excuse to seek a record 2.8 percent hike, and a S$10.9 billion gaping hole in the MAS report card. Somebody has some serious explaining to do. Apologies not accepted.


  1. Some very serious explaining needed indeed !
    But then, we all can be sure none will be forth coming. Same fudging, and meanwhile the MAS warning of higher Inflation will be used as a Dammed good excuse to justify the SMRT/SBS "requests".
    What crap.

  2. "Somebody has some serious explaining to do. Apologies not accepted."

    Will the mighty emperor's famous, "I stand corrected." phase do?

    Seriously, with over 90% of the seats belonging to PAP, I wonder what the opposition parties could really do - when they object to any of PAP's policies?

  3. What the hell is MAS investing in?

    Are the losses transferred from GIC and Temasek Holdings to prop up their portfolio?

    Why is Temasek Holdings dumping our hard earned money to hijack Temasek Review Emertitus search ranking?

  4. Singaporeans have to live with a completely unaccountable and opaque government for next 5 years or more if GE2016 does not change the ruler. The oppositions cannot do anything except making more noises in the parliament. The ruling party can still bulldoze all the policies that they are advantaged regardless of Singaporeans' and the country's future. This is a fact of life and hard truth. The bottom line is that only having a complete accountable and transparent government will make this tiny rock survive in the future.

  5. Sing Dollar has been appreciating for donkey years against the US Dollar.
    Why this huge sudden loss?
    Due to foreign talents injection into MAS?
    Our previous local Singapore managers had been doing great for donkey years with Sing always appreciating.
    Good local guys got replaced by FT again?

  6. Just before our GE, we were told how good our PAP Ministers were in handling our economy last year hence the 'Grow & Share' package for all the voters.

    But now just only a few months after the GE, it's a totally different story altogether ? So fast it happened, just wonder whether anybody lied to us in order to give us the wrong impression ?

  7. 10 billion is 10,000 million. The number of natural citizens is 3 million. That amounts to 3,333 million per head.

    The MAS is very focused on the strenthening of the SGD in their fight against inflation. We are all told that story, and somehow they missed that and announces the loss due to the strength in the SGD.

    Are we daft? Im missing alot here.

  8. I think honestly there is way way more we are not told. Sugarcoating the bitter pill will not work nowadays when the electorate is growing smarter with more education, and if not, more disgruntled with all the policies in place.

  9. Something is rotten...the smell is just coming out after 5 decades of spraying perfume. When the shit hits the roof it will be big time..

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