Singapore firms continue to hedge USD exposure

SINGAPORE companies are generally a cautious bunch, they take no chances with their US dollar exposure and hedging remains an ongoing activity, said banks.

The US dollar's weakness in 2017 has seen the Singapore dollar, in line with most other currencies, strengthen - to as much as 8 per cent in early September - hurting exporters. Importers on the other hand have been enjoying a tidy windfall.

Singapore exporters selling into the US market will receive payment for goods in US dollars, which they then have to convert back to Singapore dollars. If the US dollar is depreciating, they will want to hedge their position to protect themselves from loss of value when converting into Singapore dollars.