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shela1153
04-14-2011, 05:23 AM
http://www.businessweek.com/news/2011-04-14/singapore-leads-gains-in-asian-currencies-after-revaluation.html

April 14 (Bloomberg) -- Singapore’s dollar led gains in Asian currencies as the city-state’s central bank said it would allow faster appreciation to combat inflation after its economy grew quicker than economists forecast.

The Monetary Authority of Singapore said it will re-center the currency’s band upward, after gross domestic product increased at an annualized rate of 23.5 percent in the first quarter from the previous three months, more than double the 11.4 percent predicted in a Bloomberg survey of economists.

“There’s been a lot of bullish trade riding on the back of the Singapore policy review,” said Suresh Kumar Ramanathan, a strategist at CIMB Investment Bank Bhd. in Kuala Lumpur. “The market is left to guess where the mid-point of the Singapore currency band is, so any upside will likely be limited.”

The Singapore dollar jumped 0.6 percent to 1.2491 per dollar as of 5:27 p.m. local time, according to data compiled by Bloomberg. The Taiwan dollar rose 0.2 percent to NT$29.041 and South Korea’s won advanced 0.1 percent to 1,086.85.

Taiwan’s dollar strengthened for a second day on speculation exporters were repatriating income to take advantage of the currency’s recent weakness.

“You have these export earnings being converted into Taiwan dollars,” said Suan Teck Kin, an economist at United Overseas Bank Ltd. in Singapore.

Chinese Inflation

China’s yuan advanced to its strongest level in 17 years on speculation the central bank will tighten monetary policy further to tame inflation. The currency gained 0.04 percent to close at 6.5315 per dollar.

The consumer price index rose 5.2 percent in March, the most since July 2008, according to economists in a Bloomberg survey before data due tomorrow. The government will also report that gross domestic product rose 9.4 percent from a year earlier last quarter, after increasing 9.8 percent in the previous three months, according to another survey.

China’s inflation in March may have risen 5.3 percent to 5.4 percent from a year earlier, Hong Kong-based Phoenix Television reported on its website today, citing an unidentified person.

“GDP growth is still going to be strong and price pressures remain,” said Patrick Bennett, a Hong Kong-based strategist at Standard Bank Group Ltd. “China will respond by tightening policy with a combination of stronger currency, hikes in interest rates and the reserve ratio.”

Chinese policy makers will likely ask banks to set aside more cash as reserves in the “near future,” the China Securities Journal said in a front-page commentary.

Heavy Dollar Selling

South Korea’s won advanced for a second day on speculation exporters were repatriating income to benefit from the currency’s decline to the weakest since April 1 yesterday.

“There was heavy selling of dollars from exporters,” said Kim Sung Soon, a currency dealer at Industrial Bank of Korea in Seoul. “All Asian currencies were stronger than in the morning session as the Singapore dollar led the gains.”

Elsewhere, Indonesia’s rupiah was little changed at 8,664 per dollar, according to data compiled by Bloomberg. Malaysia’s ringgit and the Philippine peso were also little changed at 3.0240 and 43.222, respectively. India and Thailand’s financial markets were closed for holidays.

--With assistance from Lilian Karunungan and David Yong in Singapore and Seyoon Kim in Seoul. Editors: Andrew Janes, Sandy Hendry

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To contact the reporter on this story: Fion Li in Hong Kong at fli59@bloomberg.net

To contact the editor responsible for this story: Sandy Hendry at shendry@bloomberg.net