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Singaporean binary option

Republic of Singapore

Economy of the Republic of Singapore : facts & statistics

Currency : SGD
Official nameRepublic of Singapore
Nominal GDP$238,700 million (2008)
GDP per capita$51,142
Real GDP growth rate2.92% (2014)
Inflation rate1.03% (2014)
Unemployment rate5.47% (2014)

Top Binary Options Brokers in Singapore

Understanding the Characteristics of Singapore Dollar

Different from the currencies, such as, U.S. dollar, the Euro, the British pound and the Japanese yen, the Singapore dollar is managed by the Monetary Authority of Singapore (MAS) to float within a band against an undisclosed basket of currencies. Since 1981, in order to achieve the political objective of “promoting sustained non-inflationary economic growth”, Singapore has began to adopt a managed floating exchange rate system.

The Monetary Authority of Singapore (MAS) is Singapore’s central bank. It monitors the exchange rate and manages to allow the exchange rate to float within a bandwidth. The MAS manages the Singapore dollar against a basket of currencies and the composition of the basket is not disclosed.

The advantage of Singapore’s currency basket based system is that, in the case of fluctuations, it allows to stabilize the exchange rate easily as there are other various currencies in the basket. The disadvantage of the system is that, the intervention operations are carried out on each of the currencies in the basket, thus it is complex. It is also difficult to know whether or not the system is operated appropriately.

Even though the population is only about 5 million, Singapore is Asia’s top financial centre. It is very likely that the Singapore dollar will rise when good news from the economic indicators is released. Therefore, it is important to pay attention to the economic indicators while trading Singapore dollar.

The currencies of emerging countries, such as South Africa and Turkey, are usually featured with high interest rates. However, as one of the emerging countries, the interest rates in Singapore are low.

List of Economic Indicators You Should Pay Attention To When Trading Singapore Dollar

IndicatorRelease dates
MAS Monetary Policy Statementtwice a year
Gross Domestic Product (GDP)quarterly
Consumer Price Indexat the end of each month
Unemployment Ratethe first Friday of each month
Industrial Production Indexat the end of each month

The important economic indicators are listed above. It is necessary to pay attention to the announcements of important person of the Monetary Authority of Singapore (MAS) and remarks of the Prime Minister. If there is a remark made by an import person or the Prime Minister on the economic stagnation, it is very likely that the market will fluctuate.

Singapore adopts a currency basket based system and the Singapore dollar is relatively stable even if some currencies fluctuate. Since Singapore dollar is one of the Asian currencies, it is also needed to pay attention to the Chinese yuan, the Korean won, and the Japanese yen as the movements of these currencies may have an impact on the Singapore dollar.

When the Chinese yuan is revalued, the Singapore dollar is very likely to rise. Therefore, it is necessary to look at the Chinese yuan revaluation while trading Singapore dollar.

Binary Options in Singapore

On this website, we will introduce a list of best binary options brokers for Singapore residents. Since the payout rates and trading details of brokers are different from one another, it is better to choose the right broker for your purpose.

What You Should Pay Attention To When Trading Singapore Dollar

When you trade the Singapore dollar, it is necessary to pay attention to the fact that, since only about 5 million people are living in Singapore, Singapore is heavily dependent on the imports. When the world situation is unstable, it cannot be said that the risk of price slump will not happen. As all the necessities of life in Singapore are imported, such as water, food and energy, they can be unstable factors for fluctuations.

Singapore is the top economic power in Asia and it has experienced rapid development in recent years. The investment environment has been enhanced and preferential tax policy has been adopted in various aspects to welcome immigrations and investment from abroad. As a result of favorable investment climate, a lot of rich people have moved to Singapore from all over the world and Singapore is considered as a country with a prosperous future.

As it is shown in the following figure, in recent years, Singapore’s real effective exchange rate has become higher than those major currencies, such as the US dollar, the euro, the Japanese yen, and the British pound.

Even though the Singapore dollar can be freely convertible, it is a managed currency that various regulations are imposed by the government. It is thus necessary to pay close attention to the general direction of the Singapore government and political issues while trading.

The Singapore dollar is often traded in the foreign exchange margin trading. It is said that the Singapore dollar currency pairs such as AUD/SGD and NZD/SGD are good matches. However, it is not a good choice to hold long term positions as the Singapore dollar is a currency with low interest rates.

Keeping in mind of important points and factors, you can seize the opportunity to make profits when you trade Singapore dollar binary options.

Changes in policy interest rate of the Singapore

2014

2015

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2015
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