28 Jan '11, 1pm

Our reader sees a "dramatic intervention by MAS to weaken the real value of the Singdollar". Do you?

ACCORDING to the Monetary Authority of Singapore's (MAS) website, our total official foreign reserves have ballooned by more than 94 per cent from US$116 billion in 2005 to about US$226 billion (S$289 billion) last year. This may look good to most people, but I see it as a dramatic intervention by MAS to weaken the real value of the Singdollar over a short span of five years by buying up freshly printed money of foreign governments. I prefer a strong Singdollar. Whenever a foreign government debases its currency, it affects our foreign reserve holding. At best, a large forex reserve gives our government a lot more money and enables our exporters to sell into markets chronically stricken with trade deficits. However, these are not necessarily a good thing. A realistically strong Singdollar allows better distribution of wealth as it does not dilute the savings and earnings o...

Full article: http://www.straitstimes.com/STForum/OnlineStory/STIStory_...

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