Halister News

(Bloomberg) -- Once upon a time currencies were designed to be a store of value. An investor could have faith that a central bank issuing notes and coins would do its best to maintain their value. But, the Lehman crisis came along and central bank text books were thrown out of the window. |

• Still, in Asia there is a place where they understand the value of a strong, stable currency
• Singapore’s central bank meets this week and the odds favor a retention of the modest and gradual appreciation path of the currency; part of its unique way of setting monetary policy
• It is serving the country well; since the depths of the global crisis in 1Q 2009 the Singapore dollar’s nominal effective exchange rate had risen around 16% by end-March; click here for chart
• Careful exchange-rate management is helping to bring Singapore a variety of benefits;
  • Singapore is now the world’s third-largest financial center
  • The country is a big player in global wealth management: last week one of the local banks announced it is swallowing the Asian private banking arm of a U.K. competitor
  • Singapore punches above its weight on the international stage, notably at G-20 and IMF discussions
• Financial safe havens are becoming harder to define in the age of quantitative easing and negative interest rates, but this island with a AAA credit rating still qualifies.
• NOTE: Mark Cranfield is an FX strategist who writes for First Word. The observations he makes are his own and are not intended as investment advice.