Singapore dollar weakens as data shows country's exports contract sharply

Data showed that the MAS easing last Thursday is justified.

Non-oil exports from Singapore has fallen by a sharp margin of 15.6% in March, according to International Enterprise Singapore, the trade promotion agency, showing that the MAS easing last Thursday is justified.

Singapore dollar eased to 1.3622/US dollar during early trades of Monday from Friday's close of 1.3571. The SGD had weakened 0.63% in the last week, moving off an 8-month high near 1.3420.

Traders said the March data proved that the 2.0% year-on-year rise in February was just a one-off and that the underlying risks to the economy are to the downside.

The contraction in Singapore exports is another sign of sluggish global demand meaning the surprise steps taken by the Monetary Authority of Singapore on Thursday was in fact necessary for shoring up growth in the City economy.

The MAS last week eased its exchange-rate based policy after growth stalled in the first quarter, darkening the outlook for the economy.

Monday's data showed that on a monthly basis, the drop in NODX eased to 0.2% from February's 4.2%.

Only two of the major ten destinations - Japan and Hong Kong - saw the shipments increasing in March. The slide in exports to The European Union, China and Indonesia mainly contributed to the month's loss.

The electronic NODX tumbled 9.1% year on year, reversing the 0.7% increase in February. Non-electronic NODX plummeted 18% in March after recoding a 2.6% increase in the previous month.

Non oil re-exports slipped 2.4% in March after rising 1.8% in February.