MAS to review dollar futures
MAS to review dollar futures
SINGAPORE (Reuter): The Monetary Authority of Singapore (MAS)
said yesterday it would review futures contracts based on the
Singapore dollar for their relevance, usefulness and potential
adverse ramifications.
"MAS is concerned about any trading activity in the Singapore
dollar which has the possibility of being destabilizing to the
market," MAS spokesman Quek How Jiang said in a written response
to questions from Reuters.
The New York Cotton Exchange (NYCE) has said it intends to
list futures contracts on the Singapore dollar, Malaysian
ringgit, Indonesian rupiah and Thai baht on FINEX, its financial
products division.
The contracts would mark FINEX's first move into Asian
currency markets.
The Malaysia Monetary Exchange (MME) signed an agreement with
the NYCE in March to allow trading of selected FINEX currency
futures and options on the floor of the MME.
There have been reports this agreement could be expanded to
include trading of Asian currency futures.
Singapore has long resisted internationalization of its
currency and keeps a tight rein on trading of the Singapore
dollar with restrictions that include requiring commercial banks
to obtain MAS permission for loans exceeding Singapore $500
million to non-residents.
In response to a question about whether the MAS would impose
restrictions on trading of Singapore dollar futures by domestic
players, Quek said measures that affected the local dollar were
"reviewed continuously for their relevance, usefulness and
adverse ramifications, if any".
"Singapore dollar currency futures, if they come into being,
would be taken into account in such review," Quek said.
On Singapore's potential loss of competitiveness if it did not
follow the MME's lead, he said the Singapore International
Monetary Exchange (SIMEX) was mindful of the increased pressure
it faced from emerging countries wanting to establish their own
futures exchanges.
"SIMEX will strive to position its market to respond swiftly
to the hedging and trading needs of investors and continue to
look for listing of new contracts," he said.