A strengthening currency is adding fuel to the living cost in the Singapore City, especially for expatriates, according to the latest survey by ECA International.
The Lion City has had a 13-step jump over the past five years to become the 18th most expensive city in the world for expatriates. In Asia, the position dipped from 8th to 10th in a year but that was mostly because of the sharp jump by other regional cities.
Human Resources expert ECA international conducts this survey every year. Tokyo tops the list in Asia followed by Hong Kong.
Globally, Kinshasa of the Democratic Republic of Congo tops the list followed by four Switzerland cities namely Zurich, Geneva, Basel and Bern. In that, Hong Kong has moved to 9th from 12th a year ago, while Tokyo has jumped from 16th to 7th rank.
Over the five-year period, however, the Japanese capital has had a steep fall from the world's most expensive city to the current 7th rank. But for Hong Kong, it is a 26-point jump from the 35th position.
Chinese cities have jumped several steps in the global rankings over five years. Shanghai, which was ranked as the 25th most expensive location for expats in the world five years ago, has moved up 15 places to the 10th most expensive. It is just ahead of Beijing (11th), Guangzhou (15th) and Shenzhen (24th).
Australia and other Asia
The Indonesian capital fell 49 places in the last five years to 156th place in the world ranking mainly due to the weakness of the rupiah, said ECA. Kuala Lumpur, the most expensive location in Malaysia, fell by 19 places over five years to 197th place in 2016.
Weakness in the Australian dollar has pushed the cities there down the global rankings, the survey showed. Sydney, the most expensive location in Australia, fell from 15th place in 2012 to 70th in this year's survey. Adelaide had the biggest fall for the country, now lying at 109th place, down 92 places from 17th.
ECA experts said Singapore's cost is rising mainly due to strengthening currency.
"In spite of relatively low levels of inflation in the past 12 months, a strengthening currency versus the Australian dollar and slightly higher rates of inflation for international assignees over the period as a whole has pushed Singapore above locations in Australia over the course of the past five surveys," said Lee Quane, regional director, Asia, ECA International.
The Singapore dollar traded at an over one month high against the dollar on Wednesday as the recent news from the US shows that further rate hikes by the Federal Reserve will take longer than earlier anticipated.
The USD/SGD pair dropped to 1.3484, its lowest since 3 May, from the previous close of 1.3514. The Singdollar has rallied more than 2% due to the negative data surprise from the US last week.
The local dollar had fallen 2.4% against the greenback in May but has substantially reversed the losses in the first few days itself, making a 2.2% reversal from last month's close to date.
The Monetary Authority of Singapore (MAS) had taken specific measures in mid-April in order to arrest the rally of the local dollar which had touched a 10-month high of 1.3350 that month.
Now that the gains of those measures have been eroded dragged by the greenback strength, the Singaporean authorities may be forced to take further steps analysts expect.
And that the latest survey report shows the rise of living cost despite the deflationary consumer price level in the country can add to the reasons for the authority.