Given that a senior cabinet minister and NTUC chief, and a jnr minister from NTUC is giving the PAP govt a bad name, maybe it’s time to remind S’poreans that the PAP govt is not all full of NTUC clowns. On Tueday I reported that Khaw and MoM Tan had the developers concerned, and today I’ll remind S’poreans that PM’s economic team (headed by Tharman) are keeping int’l investors onside (too bad about TOC, TRe readers, but then they can take comfort that locals like me too like a strong S$.)
(4 Feb) – Recent alarmist commentary may have stirred up concerns about Singapore’s economy, but in the midst of the emerging market rout, safe-haven seekers’ faith appeared unshaken as they scooped up its currency.
“We have noted its safe-haven status within the Asian region is getting stronger in past years. So when you have a broad risk off, in general the Singapore dollar will outperform,” said Ju Wang, senior foreign-exchange strategist at HSBC.
Earlier this week, global markets largely sold off, but the Singapore dollar strengthened, with the U.S. dollar fetching as little as 1.2666 on Tuesday, compared with around 1.2790 Friday. Against the currency of its neighbor Malaysia, the Singapore dollar has touched its highest level since 1998.
But To be sure, it isn’t clear the Sing’s climb is sustainable or would withstand a more extended market rout.
“When people want to take money off the table, the safe-haven tag may not be helpful,” Song said. “We can’t avoid spillover from contagion in Southeast Asia.”
Now that would have TOC, TRE readers happy, ’cause they can blame it on the govt.
BTW, here’s an interesting article on the flows in and out of Indonesia and the other Fragile Five. http://www.economist.com/blogs/buttonwood/2014/02/emerging-markets. Actually the rupiah has done relatively better than most other emerging markets currencies against the US$. So has the the Thai baht despite the political problems.
But the currencies of Thailand Indonesia, M’sia and the Philippines have fared worse against Japan’s yen than they have against the US dollar. This means that Japanese financial ,institutions may slow down their investments in the region: investing here could be like catching a falling knife. So, they’ll likely wait.