Singapore dollar plunges after MAS' monetary easing announcement

The Singapore dollar dropped 0.9% to $1.3824 against the US dollar.

The Singapore dollar weakened to a four-month low after the central bank said there’s “sufficient room” for the currency to ease if the economy weakens due to the impact of the coronavirus, according to a report by Bloomberg.

The currency, which is maintained in a band against a basket of peers, has been fluctuating near the upper end of its boundary since October, and could ease, said the Monetary Authority of Singapore (MAS) in a statement on Wednesday.

Traders across Asia have been ratcheting up bets that central banks in the region will have to ease policies as the virus outbreak saps China’s economy.

“The Singapore dollar has reacted negatively, extending its recent decline, and will likely remain under pressure as markets increasingly price in easing,” said Mitul Kotecha, senior EM strategist at TD Securities in Singapore.

The Singapore dollar dropped as much as 0.9% to $1.3824 against the U.S. dollar after the announcement. It’s the worst-performing currency in Asia on Wednesday.

Read the full report here.