The Singapore dollar is gaining recognition as a stable and secure currency in Asia, according to a recent report by Julius Baer. The report, authored by equity research analyst Jen-Ai Chua, highlights the currency’s 25-year track record of appreciation, averaging 1.55% annually, supported by Singapore’s robust economic growth and fiscal discipline. This stability has positioned the Singapore dollar as a potential alternative to the Swiss franc for investors seeking safe haven currencies amidst US dollar diversification.
The report notes that the Singapore dollar’s strength is underpinned by a unique managed float system, which is overseen by the Monetary Authority of Singapore (MAS). This system allows the currency to maintain its stability and avoid excessive market speculation. The Singapore dollar’s resilience was evident during past financial crises, such as the 1997-1998 Asian Financial Crisis and the 2008 Global Financial Crisis, where it outperformed other regional currencies.
Julius Baer has upgraded Singapore equities from Neutral to Overweight, citing the defensiveness of the Singapore dollar, attractive equity market valuations, and an anticipated liquidity boost from the Equity Market Development Programme. The report also highlights Singapore’s position as the largest forex centre in the Asia Pacific and the third largest globally, with daily trades of around $1 trillion.
As the Singapore dollar continues to demonstrate its stability and strength, it is increasingly being recognised as one of the world’s major currencies, consistently ranking within the top 15 most traded currencies globally.
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