Singapore's export-dependent economy may narrowly escape a recession in the third quarter, but the deepening financial crisis should prompt the central bank to ease monetary policy to avoid a sharper economic slowdown.
A recession is usually defined as two consecutive quarters of economic contractions. The global market meltdown has so far pushed New Zealand into a recession, and Japan is teetering on the brink of one.
Economists polled expect Singapore's central bank, the Monetary Authority of Singapore (MAS), to loosen monetary policy by letting the local dollar appreciate at a slower pace.
The central bank sets policy by managing the Singapore dollar in a secret trade-weighted band against a basket of currencies, instead of setting interest rates.
The Singapore dollar fell to a one-year low against the US dollar as the global credit crisis deepened, raising concern economic growth will slow, Bloomberg news reported on Wednesday.
The currency fell for a sixth day, the longest stretch since Aug 12, on speculation investors will avoid emerging-market assets. The benchmark stock index slid to the lowest in more than three years.
Singapore's dollar is likely to weaken further.
The Singapore dollar fell to $1.4708 against the US dollar at 1.40pm in the city from $1.4647 late in Asia yesterday. It reached $1.4724, the weakest since Oct 10, 2007.
The Monetary Authority of Singapore will slow the pace of the local dollar's appreciation at its biannual foreign-exchange policy meeting on Oct 10, according to seven of 14 strategists surveyed by Bloomberg News.
The nightmare on Wall Street reached Singapore on Wednesday, with The Straits Times Index nosediving a sharp 6.6 per cent. But it seems not many Singaporeans are too concerned.
Many said that they do not have investments in the stock market.
Most of those who expressed indifference felt that what was happening would not really affect them, at least not in the short term.
A weaker job market, lower pay and bonuses were other worries voiced.
(Extracted from Straitstimes)
A recession is usually defined as two consecutive quarters of economic contractions. The global market meltdown has so far pushed New Zealand into a recession, and Japan is teetering on the brink of one.
Economists polled expect Singapore's central bank, the Monetary Authority of Singapore (MAS), to loosen monetary policy by letting the local dollar appreciate at a slower pace.
The central bank sets policy by managing the Singapore dollar in a secret trade-weighted band against a basket of currencies, instead of setting interest rates.
The Singapore dollar fell to a one-year low against the US dollar as the global credit crisis deepened, raising concern economic growth will slow, Bloomberg news reported on Wednesday.
The currency fell for a sixth day, the longest stretch since Aug 12, on speculation investors will avoid emerging-market assets. The benchmark stock index slid to the lowest in more than three years.
Singapore's dollar is likely to weaken further.
The Singapore dollar fell to $1.4708 against the US dollar at 1.40pm in the city from $1.4647 late in Asia yesterday. It reached $1.4724, the weakest since Oct 10, 2007.
The Monetary Authority of Singapore will slow the pace of the local dollar's appreciation at its biannual foreign-exchange policy meeting on Oct 10, according to seven of 14 strategists surveyed by Bloomberg News.
The nightmare on Wall Street reached Singapore on Wednesday, with The Straits Times Index nosediving a sharp 6.6 per cent. But it seems not many Singaporeans are too concerned.
Many said that they do not have investments in the stock market.
Most of those who expressed indifference felt that what was happening would not really affect them, at least not in the short term.
A weaker job market, lower pay and bonuses were other worries voiced.
(Extracted from Straitstimes)
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