Singapore Currency Revaluation
Recently the Singapore dollar has been reevaluated upward. This is of particular note to those interested in global multicurrency investments at a time when both the US dollar and Euro are being devalued. The Singapore dollar recently traded at near record highs as improving confidence in the Asian economies continued to raise the value of all Asian currencies. In addition, bank loan statistics continued to show a faster than expected expansion of the Singaporean economy. The significance of rise of their dollar at the same time the US dollar is reaching new lows cannot be ignored by those looking for a safe haven jurisdiction in which to invest.
Singapore established the Board of Commissioners of Currency, on April 7, 1967 and issued its first coins and notes. The Singapore dollar remained exchangeable at par with the Malaysian ringgit until 1973 when it was pegged to the British sterling pound. After the demise of the sterling pound until 1985 the Singapore dollar was pegged against a fixed a trade-weighted basket of currencies. Beginning in 1985, Singapore adopted a market-oriented exchange policy monitored by the newly created Monetary Authority of Singapore or MAS. The MAS continue to set monetary policy for the Singapore dollar today. The MAS allows the dollar to float against a basket of currencies representing Singapore’s trading partners and competitors. Singapore dollars are fully backed by government assets to ensure public confidence in the dollar. The MAS policies allow the Singapore government to maintain control over inflation while at the same time ensuring Singapore’s exports remain competitive.
Singapore is Asia’s major financial hub. The upward valuation of the Singapore dollar and continued strength of the economy makes this location an attractive jurisdiction for deposits from European and North American investors. A further advantage for wealthy foreigners considering investments in Singapore is the country’s business and investor friendly banking and tax laws. In the past, many North American and European investors found banking in Singapore difficult due to the physical distance from their home country, and the requirement imposed by most banks there that opening and managing an account had to be done face-to-face in the country. As more multinational banks open branch offices in Singapore the requirement that investors physically be in Singapore is changing. Today, the multinational banks are able to provide investors with accounts in Singapore and financial advisors and account managers not very far from the accountholder’s home. These multinational banks also offer investors a diversified investment strategy including contingency plans to shift investor’s accounts to a different jurisdiction, within the same bank, on short notice, if a particular jurisdiction becomes financially unstable for any reason.