MAS loses almost S$11b

They blamed it on a strong exchange rate.

During the MAS’ Annual Report press conference, Managing Director Ravi Menon said, “Excluding exchange rate effects, MAS achieved income and net capital gains totaling S$12.3 billion during the financial year (FY) ended March 2011. Stronger global growth led to an upturn across many asset classes; MAS’ diversified investments posted valuation gains. With the recovery in asset markets over the past two years, MAS’ portfolio, excluding exchange rate effects, has more than recovered from effects of the global financial crisis.”

However, he explained that the strength of the Sing Dollar has had a bearing on the valuation of MAS’ foreign assets. “Over the FY, the Sing Dollar strengthened considerably against most currencies: 10% against the US dollar and 5.5% against the Euro. Including exchange rate effects, in Sing Dollar terms, MAS recorded a net loss of S$10.9 billion,” said Menon.

He simplified it by saying, “In short, we made good investment gains, but when measured in Sing Dollars, these gains were more than offset by the strength of the currency. If we had reported our P/L in an international currency it would show a healthy profit.”