Singapore cenbank records US$8.4b loss as currency soars

Singapore’s central bank posted a S$10.61 billion (HK$65.2 billion) net loss in its last fiscal year as the local dollar’s gains against the yen and euro diminished the value of its foreign currency holdings.

The Monetary Authority of Singapore (MAS) also said the city-state’s economy will “comfortably” meet the official growth forecast of 1-3 per cent for this year, while inflation for the full year is expected to come in at 2-3 per cent, lower than the earlier estimate of 3-4 per cent.

MAS’s loss for the financial year ended March this year, its second in three years, was just slightly below the record S$10.9 billion deficit incurred in financial year 2010/11 when the Singapore dollar also soared.

MAS made a net profit of S$2.77 billion in FY2011/12.

“We made good investment returns, but when measured in Singapore dollars these gains were more than offset by the strength of the currency,” managing director Ravi Menon said on Tuesday at a press briefing for the release of the central bank’s annual report.

The Singapore dollar gained 13.8 per cent against the yen and 6.2 per cent against the euro in the 12 months to March, the MAS said. During the same period, the Singapore dollar rose 5.1 per cent versus the British pound and 1.3 per cent against the dollar.

The central bank had total assets of S$340.4 billion as at end-March this year, up from S$319.2 billion at the end of the previous financial year.