Singapore Choose to Depreciate Its Currency

Singapore dollar declined for the sixth day against they U.S. dollar today as the country’s monetary authorities will probably use the weak national currency as a stimulus for the export-producing economy.

All major world’s central banks reduced their target interest rates earlier to fight the financial crisis. The Monetary Authority of Singapore may devalue SGD against the basket of foreign currencies in order to revive the growth of the national economy.

The Singapore dollar has been growing against the U.S. dollar until July this year. Since July the Singapore dollar depreciated by 13.5 percent against the greenback. While Singapore’s inflation has been the main target of the government the growth of the currency was stimulated, now the focus will switch on the GDP gain and the currency will be allowed to decline further.

USD/SGD rose from 1.5214 to 1.5270 as of 8:23 GMT today after reaching 1.5282 yesterday — its highest level since September 2007. The current rally lasts uninterrupted since November 11 when the currency pair was at 1.4877.

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