By Rachel Kelly | Posted:
21 July 2011 1220 hrs
SINGAPORE: The Monetary Authority of Singapore (MAS)
has recorded its biggest loss in 40 years on the back of a strong
Singapore dollar.
MAS has recorded a net loss of S$10.9 billion for its fiscal year
ended March 2011. This compared to a record net profit of S$10
billion posted last year.
The central bank said excluding exchange rate effects, it achieved
income and net capital gains totalling S$12.3 billion during the
financial year ended March 2011.
MAS disclosed these figures in its latest annual report released
Thursday.
The loss comes as the foreign exchange impact from the stronger
Singapore dollar exceeded the interest, dividend and valuation
gains on foreign assets held.
Most of MAS's assets comprise official foreign reserves.
These are invested in a diversified range of foreign currency
assets.
During the year, the Singapore dollar appreciated against most
currencies including the US dollar, Euro and Sterling Pound, but
weakened against the Yen.
The total assets of the central bank, including the Currency Fund,
grew by S$13.85 billion to S$299.75 billion in the financial year
ended 31 March 2011.
In 2010, MAS tightened its monetary policy as the economy
strengthened. It shifted to a modest and gradual appreciation of
the exchange rate policy band in April 2010.
Further tightening was undertaken in October 2010 and April 2011 as
growth became more entrenched and resource constraints more
binding.
MAS said the tighter monetary policy stance will ensure price
stability over the medium term and keep growth on a sustainable
path.
In the chairman's message of the annual report, Deputy Prime
Minister Tharman Shanmugaratnam said that "the ongoing sovereign
debt crisis in the European periphery poses significant risks -
both to global economic growth and financial stability."
Mr Shanmugaratnam added that Singapore faces a changed financial
landscape globally following the crisis of 2008-2009, and that the
regulatory approach in Singapore will "evolve, whilst retaining the
close monitoring and supervision of financial institutions that
ensures that our financial system remains resilient and
stable."
In the capital markets MAS implemented several safeguards for
investors such as guidelines on the form and content of the Product
Highlights Sheet.
MAS said it will also implement changes to fund management
regulation, aimed at raising the quality of players and enhancing
regulatory oversight to enable sustained growth of the
industry.
Going forward Mr Shanmugaratnam said MAS will continue to support
the development of Singapore as an international financial centre
"trusted for its high standards of regulation, integrity and
efficiency."
- CNA/cc
