Following the surprising change in China’s foreign exchange policy yesterday, the Singapore dollar weakened against the greenback and is now down to a five-year low at S$1.40 per US dollar.
It fell about 1.14 percent against its US counterpart to its lowest level since June 2010.
China’s surprise move on Tuesday to devalue its tightly-controlled yuan caused its currency to post its biggest one-day loss against the US dollar in 20 years, reported Channel NewsAsia. During Asian trading, the yuan fell by about 2.8 percent against the US dollar.
Other Asian currencies also reported losses, with the Philippine peso falling to a five-year low, while the Korean won weakened to hover around a three-year trough. Meanwhile, the Malaysian ringgit and Indonesian rupiah fell to lows last seen during the Asian financial crisis 17 years ago. The ringgit weakened further against the Singapore dollar at RM2.84 per S$1.
Analysts and traders believe the yuan is included in the basket of currencies used by the Monetary Authority of Singapore (MAS) to manage its monetary policy, therefore it is closely monitored against the local currency.
Nikki De Guzman, Editor at CommercialGuru, wrote this story. To contact her about this or other stories email nikki@propertyguru.com.sg
