MAS: S$5.2b investment gain in FY15/16 official foreign reserves

THE Monetary Authority of Singapore (MAS) said on Monday it recorded a S$5.2 billion investment gain in the official foreign reserves (OFR) in FY2015/16, lower than prior years due to higher valuation provisions on certain equity investments.

In the previous financial year, MAS recorded an investment gain of S$10.4 billion. As at March 31, 2016, the OFR stood at S$332 billion.

"The increase in provisions was due mainly to the market values of some equity securities in MAS's portfolio falling below cost, as global equity markets declined in FY2015/16," the central bank said in its annual report.

The investment gain is derived after stripping out currency translation effects. About three-quarters of the OFR are denominated in the G4 currencies (US dollar, euro, yen and sterling), with the greenback forming the bulk among the G4 currencies.

But currency movements have no impact on the international purchasing power of the OFR; they do not affect MAS's ability to conduct exchange rate policy or provide a buffer in the event of a sharp deterioration in Singapore's balance of payments, the central bank said.