Strong currency puts Singapore central bank

Singapore's central bank Thursday announced an annual net loss of Sg$10.9 billion ($8.9 billion) as the strong local dollar sent it into the red for just the second time in its 40-year history. The net loss for the year to March came as the city's currency hit record highs against the greenback and also jumped against the euro, driving down the value of the Monetary Authority of Singapore's foreign asset holdings. The central bank made a profit of Sg$10 billion in the previous year. If the impact from a stronger Singapore dollar was excluded, the MAS said it would have recorded income and net capital gains of Sg$12.3 during the recently concluded fiscal year. "Over the FY (financial year), the Sing (Singapore) dollar strengthened considerably against most currencies," MAS managing director Ravi Menon said in remarks posted on the central bank's website. "In short, we made good investment gains, but when measured in Sing (Singapore) dollars, these gains were more than offset by the strength of the currency," he said. According to Menon, in the year the March the local currency strengthened almost 10 percent against the US dollar. In early Thursday trade the greenback sank to an all-time low Sg$1.2114. Against the euro the Singapore dollar gained 5.5 percent, he added. The local unit has soared, along with the currencies of other Asian nations, as traders sink cash into the region in a quest for better returns on their investments than they would get in the West. Assets held by the MAS was worth Sg$299.75 billion dollars in the year to March and most of these comprised of official foreign reserves, the central bank said in its annual report released Thursday. The central bank said the reserves were for the conduct of monetary policy and also to safeguard the local currency.