Wednesday, July 11, 2001 Singapore dollar sinks to new 11-year low

By KATHY FONG THE Singapore dollar tumbled to a fresh 11-year low of US$0.5441 compared to the US dollar yesterday following the release of advance second-quarter gross domestic product (GDP) data which indicated that Singapore had slipped into a technical recession.

The currency was also lower against the ringgit at RM2.07 per Singapore dollar. It was worth RM2.185 a year ago.

Forex dealers said the poor Singapore GDP data had shocked the market, prompting heavy selling of the currency, although the Singapore government had earlier warned of a longer-than-expected economic slowdown in the city state.

Advance estimates issued by the government yesterday showed that Singapore's GDP shrank 0.8% year-on-year in the second quarter and fell 10.1% on an annualised quarter-on-quarter basis.

The dismal figures also sparked speculation that the Singapore central bank might change its monetary stance to neutral in place of its long-held policy of seeking a gradual and modest appreciation of the Singapore dollar.

"All eyes are now on the release of the annual report and mid-year policy review by the Monetary Authority of Singapore on Thursday," said a forex dealer.

http://biz.thestar.com.my/news/story.asp?file=/2001/7/11/business/11b01ing&sec=business

-- Martin Thompson (mthom1927@aol.com), July 11, 2001