The usually robust Singapore dollar plunged to a 37-month low against the US dollar yesterday, sending the already-volatile Malaysian dollar and other Southeast Asian currencies into a tailspin.
The Singapore unit fell sharply after the Monetary Authority of Singapore said it was not overly concerned by a five-per cent drop in the currency during regional foreign exchange turmoil, dealers said.
The Singapore unit, regarded as a safe haven currency in times of regional crises, dived to 1.5140 against the US dollar - a level last posted in July 1994. It recovered slightly to 1.5080 on market rumours that some of the big local banks were selling the greenback.
'The regional currencies fell down like a rock with rotational play on the Singapore dollar sparking off the regionwide weakness,' said Alison Seng, analyst with US research house Standard and Poor's MMS.
The Singapore dollar has fallen by 5.9 per cent against the US dollar since July 1, a day before the effective devaluation of the Thai baht, which triggered unprecedented pressure on other Asian currencies.
The Singapore dollar's fall pushed down the already volatile Malaysian dollar, the Indonesian rupiah and the Thai baht.
