Singapore’s reopening boom draws big money and bubble fears

[letsrock]

Actually salaries did not increase anywhere in the world except in asia and usa.

Salaries are pretty low in Uk and europe.

 

[Mista]

Singapore dollar the world’s other safe haven​

SINGAPORE – In the latest salvo in its fight against inflation, Singapore’s central bank tightened monetary policy on Friday (October 14), allowing the national dollar to appreciate to curb domestic cost pressures in a move likely to bolster the currency’s increasingly favored status as it demonstrates resilience against the fast-appreciating US dollar.

The Monetary Authority of Singapore (MAS) said in a statement that it would raise the mid-point of the Singapore dollar policy band “up to its prevailing level,” a less aggressive move than some observers expected. Specifically, MAS refrained from adjustments to the slope or width of the currency band, both closely watched policy tools it could have used.

The MAS uses exchange rates, managed against a trade-weighted undisclosed basket of currencies from Singapore’s major trading partners, as its primary monetary policy tool to ease import costs, the main contributor to inflation in a city-state that imports almost everything it consumes, leaving domestic interest rates to shadow those of the US Federal Reserve.

“By not changing the slope of the band, [the MAS] took the calibrated approach of not allowing the pace of currency appreciation to quicken further. This is especially given the fact that the Singapore dollar is already one of the strongest performing currencies against the US dollar so far this year,” said Cheryl Chan, senior vice president for capital markets at digital securities exchange ADDX.

While Singapore’s dollar has indeed weakened against the US dollar, depreciating around 5.7% against the greenback from the start of the year through October 13, it has outperformed regional peers whose currencies have dropped by double digits over the same period and is trading at record levels against major currencies like the Japanese yen, now at a 32-year low.

“The move today consolidates the Singapore dollar’s gains against a basket of international currencies and therefore enhances its status as a safe haven currency in the global capital markets. This will likely strengthen Singapore’s value proposition as an important global and Asian wealth management hub,” ADDX’s Chan told Asia Times.

The Singapore dollar strengthened as much as 0.7% to 1.4229 per US dollar after the MAS’ tightening. Among the reasons for the local currency’s resilience against a backdrop of high inflation and economic uncertainty, analysts say, are that Singapore enjoys a triple-A sovereign credit rating, a significant current account surplus and a rich store of foreign currency reserves.

Wall Street banks such as Citigroup Inc and Goldman Sachs Group are reportedly bullish on the currency, with the latter naming the Singapore dollar “our favored currency in non-Japan Asia” in September amid wagers that it would rally against the greenback should MAS tighten policy this month, as it has.

But a stronger Singapore dollar can also be a double-edged sword. An appreciating local currency has stoked concerns about the erosion of Singapore’s export competitiveness, particularly with weakening demand from China now exerting downward pressure on the city-state’s manufacturing performance and fears that other major trading partners such as the US are slowing or headed for recession as they bid to curb inflation with rate hikes.

“A Singapore dollar that is too strong could hurt exports and negatively impact economic growth at a time when the risk of a full-scale global recession cannot be written off,” Chan added. “This comes at a time when the global economy potentially faces a hard landing in light of factors such as the slowdown in China and central banks in the West raising interest rates aggressively.”

The MAS, in its half-yearly policy statement, said the global economy would face high inflation and lower growth in 2023, noting that Singapore’s economic growth will “come in below trend” next year, leading it to assess that, “on balance, a further tightening of monetary policy is needed to help ensure that price pressures are dampened over the next few quarters.”

Friday’s adjustment is the fifth time Singapore’s monetary policy has been adjusted in the past year and comes amid core consumer inflation in the city-state hitting a near 14-year high in August – rising 5.1% year-on-year, up from 4.8% in the previous month – led by sharp increases in the prices of services and food, which were up 3.8% and 6.1% respectively.

The MAS said that it expects core inflation to “stay around 5%” for the rest of the year, and into early 2023. August’s headline consumer price index (CPI), or overall inflation, came in at 7.5% year on year, surpassing the 7% in July. For the whole of 2022, the central bank expects core inflation to average around 4% while headline inflation is projected to be around 6%.

Singapore’s central bank projects that inflation will only “ease more discernibly in the latter half of 2023.” Its monetary policy decision was accompanied by advance estimates showing better-than-expected third-quarter growth with a 4.4% expansion year-on-year, or 1.5% growth on a quarter-on-quarter seasonally adjusted basis, up from a 0.2% contraction in the second quarter.

“Further easing of the Covid measures has been the fundamental reason behind the rebound. Tourist arrivals are now near pre-Covid levels. A strong pent-up demand domestically is further icing on the cake,” DBS Group Research senior economists Irvin Seah and Philip Wee said in a note, referring to pandemic-related restrictions that have been almost entirely relaxed since early April.

Manufacturing output contracted and financial services charted a weaker third quarter showing compared to the April-June period, reflecting moves by Singapore’s government to downgrade its 2022 gross domestic product (GDP) forecast in August to between 3-4% from 3-5%, citing a weaker external demand outlook and significant downside risks to the global economy.

DBS’ Seah and Wee said third-quarter growth momentum implied “a very modest upside risk” to their 3.5% full-year GDP growth estimate. “However, external headwinds are certainly picking up. Tighter monetary conditions, high inflation, and geopolitical tensions will exert even greater pressure on global economic growth momentum in the coming quarter,” they said.

The pair said the Singapore dollar rate is at “a sweet spot for market participants” but cautioned that “exchange rate appreciation alone cannot be the panacea.” To avert a “destabilizing wage-price spiral,” Seah and Wee said Singapore’s government would encourage employers and workers to “boost skills upgrading and to increase productivity to keep the country competitive.”

Singapore dollar the world’s other safe haven

SINGAPORE – In the latest salvo in its fight against inflation, Singapore’s central bank tightened monetary policy on Friday (October 14), allowing the national dollar to appreciate …

asiatimes.com

 

[Song Hong]

Singapore is under very high inflation. PM Lee Hsien Loong may see PAP losing power in his life time,

Over the years, suppressing wages through mass migration, pushing up properties to enrich the elites have created a ultra hardcore anti PAP peasants. Only very recently did the government finally alarm.

MSM and greedy elites keep barking wages are too high, while obviously people are now struggling. Government is determine to make wage stagnant even during inflation. Good luck these greedy elites.

Manpower nightmare: F&B businesses offer higher pay to no or few takers, urge MOM to relook foreign labour policy

SINGAPORE — Mr Jeremy Cheok has just two requirements for anyone willing to work in the restaurant he founded: Two hands and two legs. Age, he said, is not a factor.

www.todayonline.com

How the high cost of living is hitting Singapore's poor

Asia's rising food costs are hitting the region's poor, despite the fall in rice prices in 2021.

www.bbc.com

 

[Song Hong]

Singapore inflation at record high while most workers salary are stagnant.

S'pore core inflation near 14-year high of 5.1% in August on more costly food, services

Core inflation is up from 4.8 per cent in July. This marks its highest level since November 2008. Read more at straitstimes.com.

www.straitstimes.com

 

[Mista]

Singapore saw record $448 billion inflow of new money in 2021: MAS data

Singapore attracted $448 billion last year, 59 per cent higher than the previous year, the latest MAS data show. Read more at straitstimes.com.

www.straitstimes.com

Singapore saw record $448 billion inflow of new money last year: MAS data​

SINGAPORE– Singapore can absorb record inflows of new money, the central bank chief said, allaying concerns of a real estate bubble even as rents and prices surge to unprecedented highs.

The Asian financial hub attracted $448 billion last year, 59 per cent higher than the previous year, the latest data from the Monetary Authority of Singapore shows.

“When a large sum of money comes into any country, you should be worried about it,” MAS managing director Ravi Menon said in an interview with Bloomberg Television’s Haslinda Amin. One such concern is flows into the property market driving up prices. Rather than blocking money coming in, the regulator has imposed measures on the real estate sector to prevent overheating. “We’ve got that under control,” he said.

Singapore’s efforts to build an international wealth hub are paying off as the city enjoys a post-Covid-19 resurgence, attracting investors drawn to its stability. Assets managed by local firms soared 16 per cent in 2021 to US$4 trillion (S$5.7 trillion), mostly from overseas, exceeding the global growth rate. Investors from US hedge fund titan Ray Dalio to Indian billionaire Mukesh Ambani are setting up offices to manage their personal wealth.

Singapore’s housing market has defied a slump reported in other major markets including Australia, Hong Kong and Canada. leading the Government to take steps to cool the market. Landlords meanwhile are asking tenants for big rent increases, sometimes as much as double, when they extend leases.

The inflows, which are roughly three-quarters of Singapore’s nominal gross domestic product, come on top of gains from higher asset prices last year, according to the central bank. The assets are helping to boost the financial hub as it seeks to add as many as 20,000 finance jobs over five years, in areas including wealth management and sustainable financing.

Mr Menon said money is coming from growing wealth across Asia, where the rich are seeking a place to invest. He acknowledged that North Asia’s affluent contribute a large portion of asset flows into Singapore.

“They are richer, they have more investable assets,” he said, speaking ahead of Singapore’s FinTech Festival that starts on Wednesday.

In China, Asia’s largest wealth market, assets plummeted following the Communist Party congress, where President Xi Jinping solidified his grip on power.

Asked whether China may see accelerated capital outflows, Mr Menon said it is too early to tell.

“There’s already some happening,” he said. “Some of it have come to Singapore, you would have seen in the last few years. I am not sure we are looking at any marked pickup.”

In the meantime, Singapore’s capital and financial markets, as well as its banking system, are deep and liquid enough to handle large fund flows, he said. MAS, which also serves as financial regulator, is strict when it comes to illicit fund flows, repeatedly reminding financial institutions to be on guard, Mr Menon said.

“There’s so much money coming in, you can choose,” he said. BLOOMBERG

 

[Song Hong]

Singapore saw record $448 billion inflow of new money in 2021: MAS data

Singapore attracted $448 billion last year, 59 per cent higher than the previous year, the latest MAS data show. Read more at straitstimes.com.

www.straitstimes.com

Singapore saw record $448 billion inflow of new money last year: MAS data​

SINGAPORE– Singapore can absorb record inflows of new money, the central bank chief said, allaying concerns of a real estate bubble even as rents and prices surge to unprecedented highs.

The Asian financial hub attracted $448 billion last year, 59 per cent higher than the previous year, the latest data from the Monetary Authority of Singapore shows.

“When a large sum of money comes into any country, you should be worried about it,” MAS managing director Ravi Menon said in an interview with Bloomberg Television’s Haslinda Amin. One such concern is flows into the property market driving up prices. Rather than blocking money coming in, the regulator has imposed measures on the real estate sector to prevent overheating. “We’ve got that under control,” he said.

Singapore’s efforts to build an international wealth hub are paying off as the city enjoys a post-Covid-19 resurgence, attracting investors drawn to its stability. Assets managed by local firms soared 16 per cent in 2021 to US$4 trillion (S$5.7 trillion), mostly from overseas, exceeding the global growth rate. Investors from US hedge fund titan Ray Dalio to Indian billionaire Mukesh Ambani are setting up offices to manage their personal wealth.

Singapore’s housing market has defied a slump reported in other major markets including Australia, Hong Kong and Canada. leading the Government to take steps to cool the market. Landlords meanwhile are asking tenants for big rent increases, sometimes as much as double, when they extend leases.

The inflows, which are roughly three-quarters of Singapore’s nominal gross domestic product, come on top of gains from higher asset prices last year, according to the central bank. The assets are helping to boost the financial hub as it seeks to add as many as 20,000 finance jobs over five years, in areas including wealth management and sustainable financing.

Mr Menon said money is coming from growing wealth across Asia, where the rich are seeking a place to invest. He acknowledged that North Asia’s affluent contribute a large portion of asset flows into Singapore.

“They are richer, they have more investable assets,” he said, speaking ahead of Singapore’s FinTech Festival that starts on Wednesday.

In China, Asia’s largest wealth market, assets plummeted following the Communist Party congress, where President Xi Jinping solidified his grip on power.

Asked whether China may see accelerated capital outflows, Mr Menon said it is too early to tell.

“There’s already some happening,” he said. “Some of it have come to Singapore, you would have seen in the last few years. I am not sure we are looking at any marked pickup.”

In the meantime, Singapore’s capital and financial markets, as well as its banking system, are deep and liquid enough to handle large fund flows, he said. MAS, which also serves as financial regulator, is strict when it comes to illicit fund flows, repeatedly reminding financial institutions to be on guard, Mr Menon said.

“There’s so much money coming in, you can choose,” he said. BLOOMBERG

GoS has not move out of the mindset of sprouting rubbish and not discussing the real situation. If we look at net balance of capital account, it is horrible, These days, even China CPC government media has more truth and more willing to inform people.

Worse is Singapore textbook. It is intent to keep citizen stupid, and slumber,

 

[letsrock]

Does singapore have any independent control on interest rates or does it just follow the fed. I think their currency is pegged.

 

[Song Hong]

Whole world other than Eurozone and Russia is a derivative of USD, Everyone have a Impossible trinity situation and everyone pretends their central bank are independent. They are actually dog of fed.

Only ECB has more independent but Europe is a economic union without politcal union and without military union. US can easily trigger a economic and currency crisis. See what is happening today.

Only HK is peg. SGD is once peg. HK monetary policies is crazy and was a last minute subversive and atrocious initiative just before 1997.

Does singapore have any independent control on interest rates or does it just follow the fed. I think their currency is pegged.

 

[Mista]

Does singapore have any independent control on interest rates or does it just follow the fed. I think their currency is pegged.

Our monetary policy revolves around managing the exchange rate against our trading partners as we are a small open economy with high import content in our consumption.

Our interest rates thus follow global interest rates, which is mainly determined by US fed rates.

Explainer: How does MAS monetary policy work and can it help tame inflation?

SINGAPORE: To rein in inflation - which is expected to keep rising - the Monetary Authority of Singapore (MAS) further tightened its monetary policy in a two-in-one move on Thurs

www.channelnewsasia.com

 

[Song Hong]

Singapore balance of trade is still healthy. This is not easy.

 

[Mista]

Singaporeans, PRs saw 2.1% rise in real median income this year despite inflation: MOM

This year’s growth was, however, lower than the pre-Covid-19 average of 3.8 per cent. Read more at straitstimes.com.

www.straitstimes.com

Singaporeans, PRs saw 2.1% rise in real median income this year despite inflation: MOM​

SINGAPORE – Higher inflation ate into the take-home pay of resident workers in 2022, but real median income still grew at 2.1 per cent, an improvement over 2021’s 0.9 per cent.

The year’s growth in real income – after adjusting for inflation – was nonetheless lower than the pre-Covid-19 average of 3.8 per cent annually for 2014 to 2019 when inflation was lower, the Ministry of Manpower (MOM) said on Thursday in its advance 2022 labour force report.

The report draws on data from MOM’s mid-year Comprehensive Labour Force Survey conducted from April to July.

It showed that lower-wage workers saw stronger income growth than the median, with real income for a worker in the 20th percentile for income rising 4.8 per cent.

The growth exceeds that seen from 2014 to 2019, as well as 2021, and workers in the 20th percentile can expect their wages to be 55 per cent of the median, the lowest gap since 2004, MOM said.

It chalked up the closing gap to initiatives by the three-way partnership between the Government, unions and employers to uplift wages, such as the broadening of the Progressive Wage Model.

Meanwhile, the employment rate for Singaporeans and permanent residents (PRs) rose for the second straight year to 67.5 per cent in June, higher by 2.3 percentage points than the pre-Covid-19 rate of 65.2 per cent in 2019 and up from 67.2 per cent in 2021.

“If ranked against Organisation for Economic Cooperation and Development countries on overall employment rate, Singapore would place third,” MOM noted.

The unemployment rate fell over the year – from 3.4 per cent to 2.6 per cent for professionals, managers, executives and technicians (PMETs) and from 5.1 per cent to 4.4 per cent for non-PMETs.

The long-term unemployment rate also dropped to around pre-Covid-19 levels for both PMETs, at 0.5 per cent, and non-PMETs, at 0.7 per cent, MOM added.

The proportion of PMETs among all employed residents increased to 64 per cent from 62 per cent in 2021.

“The higher share reflects a highly educated workforce and sustained employment growth in sectors such as information and communications, finance and insurance, and professional services,” MOM said.

It added: “With the economic recovery, the scale-back in Covid-19-related temporary jobs and the tight labour market, the proportion of employees in non-permanent employment also fell back to pre-Covid-19 levels (11 per cent).”

The number and proportion of discouraged workers, which refer to those outside the labour force who are not actively looking for a job because they believe their job search will not yield results, also continued to decline for the second consecutive year, falling from a record high of 0.7 per cent, or 16,400, in 2020 to 0.4 per cent, or 8,900, in 2022.

However, the labour force participation rate in Singapore declined by 0.5 percentage point to 70 per cent this year, although it remained above pre-Covid-19 levels, said MOM.

“Labour force participation has eased slightly from the high in 2021, when temporary pandemic-related roles, such as temperature screeners and safe distancing ambassadors, had drawn in more residents outside the labour force than a typical year,” MOM said.

The increase in participation rate is likely to moderate in the future because of the ageing population, it added.

Minister for Manpower Tan See Leng told reporters at a briefing on the report on Thursday that avenues are available for those outside the labour force to re-enter it full-time, citing investments in career conversion programmes and other schemes to promote upskilling and reskilling.

“For those who decide to pursue their own interests, it could be an aspirational motivation as well,” he said.

Meanwhile, the uptick in layoffs in the third quarter, mostly driven by the technology sector, may contribute to a check on wage growth and put it on a more sustainable trajectory, said Dr Tan.

Mr Ang Boon Heng, director of MOM’s manpower research and statistics department, said: “We will be more worried if retrenchments are due to the lack of demand or companies closing down.”

Instead, he said layoffs remain within the range seen during periods of economic growth, albeit higher than record lows set earlier in 2022.

Citing retrenchment studies that MOM carried out in 2021, Mr Ang said: “When we ask many of the residents who were retrenched, we find that they are able to gain employment... and their pay actually matches what they previously earned.”