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

SINGAPORE — The Republic’s central bank posted a S$10.61 billion net loss in its last fiscal year as the local dollar’s gains against the yen and euro diminished the value of its foreign currency holdings.

The MAS has penalised 22 financial institutions over the past three years for failing to comply with rules to prevent money laundering and terrorism financing. TODAY file photo

The MAS has penalised 22 financial institutions over the past three years for failing to comply with rules to prevent money laundering and terrorism financing. TODAY file photo

SINGAPORE — The Republic’s central bank posted a S$10.61 billion net loss in its last fiscal year as the local dollar’s gains against the yen and euro diminished the value of its foreign currency holdings. The Monetary Authority of Singapore (MAS) also said the city-state’s economy will “comfortably” meet the official growth forecast of 1-3 per cent for 2013, while inflation for the full year is expected to come in at 2-3 per cent, lower than the earlier estimate of 3-4 per cent. MAS’s loss for the financial year ended March 2013, its second in three years, was just slightly below the record S$10.9 billion deficit incurred in financial year 2010/11 when the Singapore dollar also soared. MAS made a net profit of S$2.77 billion in FY2011/12. “We made good investment returns, but when measured in Singapore dollars these gains were more than offset by the strength of the currency,” managing director Ravi Menon said today (July 23) at a press briefing for the release of the central bank’s annual report. The Singapore dollar gained 13.8 per cent against the yen and 6.2 per cent against the euro in the 12 months to March, the MAS said. During the same period, the Singapore dollar rose 5.1 per cent versus the British pound and 1.3 per cent against the dollar. The central bank had total assets of S$340.4 billion as at end-March 2013, up from S$319.2 billion at the end of the previous financial year. On the Singapore economy, that MAS said that growth in the first half of 2013 was estimated at 2 per cent and should pick up during the latter part of the year. The economy grew by just 1.3 per cent in 2012. The report added that headline inflation would ease this year from last year’s 4.6 per cent, but core inflation — which excludes the cost of cars and accommodation — could rise “moderately” to 2 per cent or slightly higher in the latter half of 2013 due to continuing tightness in the labour market. CONSUMER PRICE INDEX Meanwhile, the MAS said that the Consumer Price Index (CPI) has come down closer to historical trends and within its comfort zone. The CPI in June edged up for a second straight month, climbing 1.8 per cent compared to the same month a year ago, following a year-on-year rise of 1.6 per cent in May and a three-year low of 1.5 per cent in April, according to the Department of Statistics today. The rise, coming after falls earlier this year, was due to a rise in food costs and as car prices. Economists surveyed last week by Reuters generally predicted an increase of 1.6 to 1.8 per cent for June. Mr Menon said the June increase is the first time in three years that CPI inflation has come down closer to historical trends and within the comfort range of Singapore’s central bank. WITH ADDITIONAL REPORTING FROM REUTERS

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