Thursday, July 21, 2011

Singapore Central Bank Also Losing Big From Currency Intervention

Much like the Swiss National Bank, Singapore's central bank made large losses from its currency intervention, S$10.9 billion or about 3.5% of GDP.

Ironically, the losses were formally revealed only now because it has started to allow the currency to rise more in value than before, but the real cause of the losses was when they in the past bought large amounts of foreign currency assets at overvalued exchange rates relative to the Singapore dollar. Because most other currencies are arguably still overvalued relative to the Singapore dollar, this means that there are more hidden losses that sooner or later are going to have to be revealed.


Post a Comment

<< Home