MAS posts S$10b net loss as Singapore dollar soars

[felixleong]

I think they held too little USD
USD was doing well

euro and yen... very very terrible

[specuvestor]

why on earth a central bank (a govt body) still has to be concerned with making profit?

MAS manages some of Singapore's reserves also. Why, I do not know.

Ditto. GIC should be the one managing those foreign reserves rather than MAS outsourcing to other 3rd parties.

In the US the seniorage earned is rechannelled back to the treasury. I'm suspecting that is not the case for MAS which is why they have excess funds to outcource. as per 10.4 of the AR.

Question:
If you are the boss.
Does it really matter if your biz gain profit in foreign currency but due to currency exchange rate become a lost?

The confusing part is on one hand, your biz is doing well (in term of foreign currency) but in actual facts, your purchasing power in your country is loss?

To complicate matters: MAS is the one determining the FX level via the NEER.

Put in another way, would Singaporeans be better off if MAS made $10b profit but SGD is at 1.80 to USD?

Nonethless I would want to see more look through details on MAS PnL. Can't conclude how they lose the $10b in FX.

[mulyc]

Even Zerohedge has picked it up, although the title is way too misleading...

http://www.zerohedge.com/news/2013-07-23...-financing

[CityFarmer]

More news report on the issue.

IMO, confidentiality of MAS operation is necessary, since one of the job scope is to fence out currency speculators.

Strong S’pore dollar hits MAS bottom line

The Monetary Authority of Singapore (MAS) reported a net loss of S$10.6 billion for the financial year that ended in March, as the strength of the Singapore dollar offset gains made from investments. This was the second loss recorded in three years, and came in just below the S$10.9 billion deficit in the 2010-11 financial year.

“In financial year 2012-13, the Singapore dollar appreciated against all major currencies … we made good investment returns, but when measured in Singapore dollars, these gains were more than offset by the strength of the currency,” said MAS Managing Director Ravi Menon.

http://www.todayonline.com/business/stro...ottom-line

[freedom]

many years ago, MAS' monetary policy already determines that MAS must endure financial loss to manage its inflation target. To counter inflation, MAS must raise SGD exchange rate, which undoubtedly will incur loss for its foreign reserves if we assume the return on its foreign reserves should be minimum(for stability, you can expect MAS to invest reserves like GIC, as GIC does not have an inflation target mandate and GIC does not care whether foreign capital coming in or going out, but MAS does. Mostly, MAS just invests in liquid assets such as US treasuries. Compared to US treasuries, stocks are highly illiquid.).

[AlphaQuant]

well, look at it as a whole - MAS loses, GIC and Temasek are so-so, but the strong sgd policy leads to massive capital inflows propping up consumption which generates taxes into the G coffers.

not sure what the net-net is but the fact that the strong sgd policy has been ard for a while suggests that the G profits more as a whole.

Still, i have always thought the strong sgd policy is a recipe for high domestic inflation=> a low usdsgd leads to a low SOR leads to asset inflation. Might be good for the coffers but tough luck for the young blokes.

[Temperament]

For layman, all we know is Singapore has to have a strong $ for we have nothing much or anything else except our $Billion Reserve. Imagine how much more inflation will be in Singapore if we devalue our $.

[godjira1]

If sgd devalues, it is boon to exporters i suppose but tough for almost every consumer. I guess this is one of those policy choices where someone up there needs to tikam where the best mix is likely to be.

[specuvestor]

well, look at it as a whole - MAS loses, GIC and Temasek are so-so, but the strong sgd policy leads to massive capital inflows propping up consumption which generates taxes into the G coffers.

not sure what the net-net is but the fact that the strong sgd policy has been ard for a while suggests that the G profits more as a whole.

Still, i have always thought the strong sgd policy is a recipe for high domestic inflation=> a low usdsgd leads to a low SOR leads to asset inflation. Might be good for the coffers but tough luck for the young blokes.

If the economy does well as a whole, the taxes will take care of itself. If a company does well, the stock price will take care of itself. It is extremely myopic and dangerous when management/ govt looks at the wrong indicator. That's what happened during the Singapore Inc period of the 90s when govt focus was on PnL rather than long tern economic competitiveness and growth. The problems we have with asset inflation and infrastructure is not a last year issue. The roots started during the Goh era.

Used to be SGD controls our inflation because controling COGS was paramount to consumption cost. However with asset inflation and naturally labour inflation, operating expense becomes more critical. Hence MAS is now at a rock and a hard place as an appreciating SGD did little to curb CPI by controlling import cost as domestic cost of living soar, as evidenced in the past 5 years.

[Temperament]

Money is always not enough one. Especially if i have a chance to access or to expose to millions of $ everyday, how can i promise anyone anything? You can???
Oops sorry!
i mean to post at CPIB corruption case.

---

well, look at it as a whole - MAS loses, GIC and Temasek are so-so, but the strong sgd policy leads to massive capital inflows propping up consumption which generates taxes into the G coffers.

not sure what the net-net is but the fact that the strong sgd policy has been ard for a while suggests that the G profits more as a whole.

Still, i have always thought the strong sgd policy is a recipe for high domestic inflation=> a low usdsgd leads to a low SOR leads to asset inflation. Might be good for the coffers but tough luck for the young blokes.

If the economy does well as a whole, the taxes will take care of itself. If a company does well, the stock price will take care of itself. It is extremely myopic and dangerous when management/ govt looks at the wrong indicator. That's what happened during the Singapore Inc period of the 90s when govt focus was on PnL rather than long tern economic competitiveness and growth. The problems we have with asset inflation and infrastructure is not a last year issue. The roots started during the Goh era.

Used to be SGD controls our inflation because controling COGS was paramount to consumption cost. However with asset inflation and naturally labour inflation, operating expense becomes more critical. Hence MAS is now at a rock and a hard place as an appreciating SGD did little to curb CPI by controlling import cost as domestic cost of living soar, as evidenced in the past 5 years.

O. K.
But how much is due to "QE"? How much is due to COE? And how much is due to importing people? How much is due to GOH SAY TAX? And how much is due to Pinky Loong and his gangs?
Looks like after all these, very, very little are left for us (the people).
Layman's thinking.