MAS suffered $10.6b losses on back of SGD translation effects

SGD appreciated vs major currencies.

In his opening remarks at the Monetary Authority of Singapore (MAS) Annual Report 2012/13 Press Conference, Mr Ravi Menon, MAS managing director, said that strong Singapore dollar impacts MAS profits despite good investment returns.

He noted that MAS made investment gains of S$8.9 billion for the FY ended March 2013. This is lower than the S$12.0 billion earned in the previous FY, due primarily to lower interest income as interest rates continued to decline in FY 2012/13.

"But MAS recorded an overall loss of S$10.6 billion after taking into account translation effects from an appreciating Singapore dollar. In FY 2012/13, the Singapore dollar appreciated against all major currencies.

In particular, the Singapore dollar strengthened 5% against the Euro, 6% against the Sterling, and 14% against the Yen during FY, Menon noted.

SGD also appreciated against traditionally strong currencies like the Aussie Dollar and the Canadian Dollar.In short, we made good investment returns, but when measured in Singapore dollars, these gains more than offset by strength of the currency.

"This is an issue of reporting currency. If we had reported our profit and loss in international currency, it would show healthy profit. It is important to note that the international purchasing power of our reserves is unaffected by the strength of the Singapore dollar," he added.