Budget 2018: Minister Keechiu’s half truth raises more concerns on Singapore’s reserves

I refer to  “Preserving reserves signals to markets strength of Singapore dollar: Chan Chun Sing“.

Keechiu Chan: “Keeping half of Singapore’s earnings from its reserves is important as it signals to currency markets the strength of the Singapore dollar.”

It has been estimated that Singapore has an estimated more than $1 trillion in reserves.  A fraction of this amount would have been sufficient to discourage currency speculators from launching any attack.

Keechiu appears to be taking Singaporeans for fools and is effectively saying this:

1budget30

It is only an inherently weak currency that needs billions in reserves to discourage attacks by speculators.

A small and prosperous country which needs “more than $1 trillion” in reserves to back up its currency is likely to be country in concealed deep shit. ;(

Why does Chan continue to believe that currency speculators will somehow anyhow attack a ‘strong’ Singapore dollar?  Keechiu should not portray currency speculators as all stupid and jiak liow bee.

If an estimated $1 trillion in reserves still cannot prevent speculative attacks on the Singapore dollar, no amount will.

Keechiu’s argument is really all hogwash.

A possible reason for Keechiu and the PAP to continue insisting on increasing our “estimated more than $1 trillion” reserves for the above-stated reason: there are huge concealed investment losses.

PAP should come clean asap because concealed investment losses – over decades – will have severe implications. 😦

 

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2 Responses to Budget 2018: Minister Keechiu’s half truth raises more concerns on Singapore’s reserves

  1. Confused says:

    “Keechiu’s argument is really all hogwash.

    A possible reason for Keechiu and the PAP to continue insisting on increasing our “estimated more than $1 trillion” reserves for the above-stated reason: there are huge concealed investment losses.”

    Without the material information on what is our exact total reserves, pap cannot blame Singaporeans from making such speculation.

    It is the duty of the highest office to come clean on how much reserves Singapore has and it is by doing that they can be held accountable to how reserves are being managed even if there are losses, these need to be declared.

    It is exactly when the information is being withheld, the pap has the thickest skin by keep coming back for more monies without showing Singaporeans if the fund managers are fit and professional to manage our reserves by consistently bring in good returns, otherwise why are Singaporeans paying millions/billions to them? They just don’t deserve the number.

    If having reserves of 1T and pap keep coming back for more monies, something is not right as a 5% return would mean $50billion every year and all the $50b can be used for the budget instead of the arbitrary 50% of NIRC.

    On the other hand, just ask around, how many nations has a reserves of the size of 1 Trillion? If Keechiu is so right, wouldn’t Singapore be in the position to take advantage of having 1T and attack other currency to make a killing and he can too use his millions to coordinate and time the attack? Do it like what George Soros did to pound? and many others round after round.

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