The Singapore dollar’s sharp gains due to haven buying in the wake of the Brexit vote is putting pressure on the city-state to undertake some monetary easing, Bloomberg News reports.
The Monetary Authority of Singapore’s trade-weighted measure of the currency reached a record high after Britain voted to exit the European Union, the report noted.
It marks a reversal of the losses incurred earlier by the currency after the monetary authority surprised markets in April by moving to a neutral policy of zero percent appreciation.
As of Friday afternoon, the Singapore dollar had advanced against 11 of its 16 major peers since the June 23 British referendum, according to Bloomberg.
The biggest gain — about 14 percent — was against the British pound.
The currency’s spike has prompted analysts from ABN Amro Bank, Royal Bank of Scotland and Nomura Holdings to predict more easing, the report said.
The Monetary Authority of Singapore (MAS), the city-state’s de facto central bank, will hold its next policy review in in October.
Easing measures are likely as Singapore’s economy has been sputtering, with gross domestic product barely growing in the first quarter from the previous three months and non-oil exports expected to shrink this year, the report noted.
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