Trump's washing machine ban could send Singapore dollar in a viral spin
Bloomberg said U.S. President Donald Trump’s attack on washing machine imports may end up putting the Singapore dollar through the spin-cycle.
If the U.S. were to step up protectionism, Singapore will be more adversely affected and if its currency were to go on a viral spin, the country’s long standing stability could be at stake.
The business portal said any escalation of U.S. protectionism with Trump’s ‘America First’ policies now shaping up sharply, Singapore could face a backlash with adverse reaction on investor expectations for the tiny Republic’s growth, monetary policy and the dollar.
The country’s economic growth has closely followed the changes in global trade for almost twenty years. Any drastic change in this would mean the Singapore dollar will leave it exposed. The more so as the country’s central bank uses the currency as a monetary policy tool instead of interest rates.
The local currency has risen about 1.6 percent against the U.S. dollar so far this year.
The Monetary Authority of Singapore is expected to shift to a 0.5 percent appreciation in the nominal effective exchange rate in April from the current zero appreciation, according to a research note from United Overseas Bank Ltd. Tuesday, said Bloomberg. Read full story here: War on Washing Machines.