SINGAPORE--The Singapore dollar recovered a bit in Asia on Friday as investors started rounding off some of their aggressive U.S. dollar bets amid a stable local economy.
The U.S. dollar was quoted at S$1.2810 in the last hour of trade in Asia Friday, compared with S$1.2841 around the same time the previous day.
On Thursday, the U.S. unit hit its highest level since July 8, helped by growing expectations of an early start to tapering of the U.S. Federal Reserve's quantitative easing measures.
The current bout of market uncertainty underscores the need for the U.S. Federal Reserve's winding down of stimulus steps to be gradual and managed carefully, Tharman Shanmugaratnam, Singapore's deputy prime minister and finance minister, said at an industry event today.
However, the tapering won't be bad for the region's economies, he said. "It is not in anyone's interest, including emerging economies, for very low global interest rates to continue indefinitely. Low or negative real interest rates have inevitably led to a search for yield, and build-up of financial imbalances in Asia," Mr. Tharman said.
Singapore's consumer prices rose at a pace within expectations in July, though accelerating slightly from the previous month due mainly to higher private road-transport costs. The consumer price index rose 1.9% year-on-year in July, equal to the median estimate for a 1.9% rise in a Dow Jones Newswires poll of seven economists. The increase was faster than the 1.8% rise in June.
Asian stock and currency markets appeared to stabilize on Friday after fears of the end of easing in the U.S. drove money out of the region this week.
Singapore government bonds were stable on Friday, awaiting fresh cues. Yield on both the 10-year and 2-year bonds was unchanged at 2.69% and 0.24% respectively.
