Currency Crash

Currency tumult stokes big bets — 15 Jan 2015

A surging dollar is pummeling currencies around the globe amid efforts to boost economic growth, prompting a wave of investor bets to profit from the upheaval.


Russia, 'fragile five' eat into their foreign reserves — 15 Jan 2015



End to Swiss cap hits retail FX brokers — 16 Jan 2015



MAS to slow appreciation of Singapore dollar

28 Jan 2015

The Monetary Authority of Singapore (MAS) says in its monetary policy statement that it will reduce the slope of the Singapore Dollar Nominal Effective Exchange Rate policy band to slow the appreciation of the currency.

SINGAPORE: The Monetary Authority of Singapore (MAS) said on Wednesday (Jan 28) it will adjust its monetary policy and let the Singapore dollar appreciate at a slower pace.

The revision in monetary policy came as a surprise as MAS was only scheduled to release its next monetary policy statement in April. MAS last made an "off-cycle" adjustment to policy in October 2001, in the aftermath of the Sep 11 attacks in the United States. At that time, MAS issued policy statements in January and July.

The Singapore dollar fell on the news, losing close to 1 per cent against the US dollar and by around 0.5 per cent against the euro. Around 11.30am, the US dollar was trading around S$1.3521, while the euro was worth S$1.5328, according to Bloomberg data.

The three-month Singapore Interbank Offered Rate (SIBOR) – a benchmark for mortgage rates – edged up to 0.65289 per cent from 0.64429 per cent.

“MAS will continue with the policy of a modest and gradual appreciation of the Singapore Dollar Nominal Effective Exchange Rate (NEER) policy band. However, the slope of the policy band will be reduced, with no change to its width and the level at which it is centred,” the central bank said in its monetary policy statement.

“This measured adjustment to the policy stance is consistent with the more benign inflation outlook in 2015 and appropriate for ensuring medium-term price stability in the economy,” it added.

INFLATION OUTLOOK "SHIFTED SIGNIFICANTLY"

MAS said the previous policy stance – which has been in place since April 2012 – was appropriate for containing domestic and imported sources of inflation, and ensuring that inflation expectations remain well anchored.

However, the outlook for inflation has since shifted significantly, largely due to the decline in global oil prices, it said.

The central bank also lowered its inflation outlook for 2015. CPI-All Items inflation, or headline inflation, is now projected to come in at -0.5 per cent to 0.5 per cent, down from 0.5 percent to 1.5 per cent in its previous inflation forecast.

As for core inflation, which excludes the cost of accommodation and private road transport, MAS said this is likely to average 0.5 per cent to 1.5 per cent this year, down from the earlier forecast of 2 per cent to 3 per cent.

The Singapore economy remains on track to grow at a moderate pace of 2 per cent to 4 per cent this year, it added.

"While Singapore has brought its exchange rate policy closer to the generalised monetary easing seen in many countries globally, it still has a modest apprecia­tion policy," DBS said in a commentary.

As such, the US dollar is expected to rise at a slower pace against the Singapore vis-a-vis the currencies of most other countries, it said.

United Overseas Bank said that in view of the lowered Singapore dollar NEER slope, the US-Singapore dollar could trade towards the 1.40-level over the next six months.

ECONOMISTS SURPRISED

Amid falling oil prices and a slowdown in inflation, many economists had been expecting the MAS to ease monetary policy in April. However, the central bank chose to act even before that, saying it will allow the Singapore dollar to appreciate at a slower pace against a basket of currencies.

Said the Head of Strategy at Fixed Income & Currencies Macquarie, Nizam Idris MD: "It was a big surprise, I thought they could have waited. The fact that they actually decided to move now, ahead of that meeting is really suggesting that they do see a lot of pressure on the downside, so far as prices are concerned. And the fall in oil prices, the easing in other central banks may have mattered as well."

Although the MAS is still keeping to its policy of a modest and gradual appreciation of the Singapore dollar against a basket of currencies of its key trading partners, analysts say the latest change will have a wide impact on the rest of the economy, including affecting trade and benchmark interest rates.

Said Mr Jeff Ng, an economist at Standard Chartered: "A weaker Sing dollar against the US dollar does suggest that import prices are going to get slightly more expensive than before. That would help to moderate the deflationary pressures that have been coming along in recent months. And I think the cheaper export prices - due to the weaker sing dollar - does help exporters as well," he said.

“The second impact I see is the higher interest rates so I think some of the households or businesses who have financing costs which are tied to floating rates will face higher financing costs in the near term and also the medium term."

SGD WEAKENS IN FOREX MARKETS

Following the surprise move by MAS, the Singapore dollar took a hit in the foreign exchange markets.

The Singapore dollar saw a depreciation against most major currencies, hitting its lowest in nearly four-and-a-half years against the US dollar, touching 1.3570 before regaining some lost ground.

At the end of the Asian trading day, it was quoted at around 1.3509 - down by 1 per cent. Meanwhile, against the euro - the Singapore dollar fell by 0.8 per cent to 1.5348. Against the ringgit, it fell 0.4 per cent to 2.6788.

Which are the most devalued currencies?

On 1 August 2008, the Zimbabwe dollar was redenominated by removing 10 zeroes and ZWD 10 billion became 1 dollar after the redenomination. On 16 January 2009, Zimbabwe issued a ZWD100 trillion bill. A roll of toilet paper in Zimbabwe costs $145,750, which is about 69 American cents.

Zimbabwe's one hundred trillion dollar (100,000,000,000,000 ZWD)

sptl123,

Only God knows which way the FX market is heading.

Don't Worry Be Happy

Devaluation by China is the next great risk for a deflationary world ~~ 4 Feb 2015

History of Chinese currency and the currency war — China sharply devalued its RMB against the U.S. dollar in July 1986.



"100 yuan for a grain" — The Chinese hyperinflation (1946 to 1949) was basically caused by 国民政府 / the Nationalist governments' desperate attempts to finance its mounting war expenditures (1946–1950) by printing money.

在1948年到1949年期间，买半个窝头的最低价格也得500元金圆券。



金圆券货币：

• 金融史上最短命的货币  ~~ 由1948年8月开始发行，至1949年7月停止流通，只使用了十个月左右，贬值却超过二万倍。
• “法币”换“黄金”政策，本想抑制货币贬值，不料却造成有钱人大量囤积黄金的后果。

1 million Gold Yuan — 1948 to 1949



10 Custom Gold Units — 1930



Why I stopped worrying and learned to love the currency collapse — 16 Oct 2013

Zimbabwe Hyperinflation Currency Collapse Explained (Part 1) — 15 Oct 2013



Zimbabwe Hyperinflation Currency Collapse Explained (Part 2) — 16 Oct 2013



Zimbabwe: Where Everyone's a Millionaire, Part 1 — 12 Sep 2012



Zimbabwe: Where Everyone is a Millionaire, Part 2 — 19 Sep 2012



Zimbabwe Super Hyper Inflation — 22 Sep 2010

Bro Zuolun, as seem from the videos; Central Bank manipulated and distorted the value of money with monetary and fiscal tools. They are good at digging a hole to cover another hole.

Good chance that the next financial crisis will likely be coming from Currency. The Swiss has started chapter 1  of the saga. 

Bro Zuolun, a good read from your link.

You always have something from your pocket; fast/fun/and fantastic! I like!