The Singapore dollar will drop further to levels it reached during the global financial crisis of 2009, an analyst credited with accurately predicting central bank decisions in the past has said.
Singdollar is likely to fall past $1.45 against the US dollar within the next six months, Vaninder Singh, an economist at NatWest Markets, has said. The analyst said the currency's weakening has become inevitable as the Monetary Authority of Singapore (MAS) is set to start its easing policy in April.
At a time when the export-driven Singapore economy is facing pressure from the slowdown in global trade, a property downturn in China has exasperated the situation, the analyst said, according to Bloomberg.
The Singapore dollar traded at $1.4424 against the greenback on Friday. In the days after Donald Trump was elected as the nest US president, the Singapore dollar has steadily tumbled againt the greenback.
On November 12, the MAS said it was monitoring the financial markets after the Singapore dollar hit 1.4158 against US dollar, a near 9-month low.
The bank however said it doesn't have any specific any exchange rate target and that there were no money market disruptions in the country.
Earlier this week economists slashed their forecast for the growth of Singapore economy in 2016 and 2017 in line with the weak global fundamentals and a sustained downward shift in GDP and export expansion in the trade-reliant country.
According to the latest survey by the Singapore central bank, private economists projected that growth would drop to 1.4 percent this year compared with a previous forecast of 1.8 percent growth. For 2017, the projected growth rate is a marginally faster 1.5 percent. Previous estimates of 2017 growth were pegged at 1.8 percent
Economists had earlier warned that a continued slack in exports and a protectionist Donald Trump presidency in the US would push Singapore's economy into a recession. Singapore's exports declined 12 percent in October, faring worse than expected and adding to the pain of a 5 percent fall in September.