SINGAPORE, The Monetary Authority of Singapore (MAS) made a net profit of S$5.3 billion in the previous financial year, according to its annual report for FY2017/18.
The figure, which excludes a S$1.1 billion contribution to the Consolidated Fund, is lower than last year's record net profit of S$24.3 billion as negative currency translation effects partially offset interest income and investment gains.
For the year that ended March 31, 2018, MAS made a gain of S$8.5 billion from the investments of its official foreign reserves (OFR).
While the OFR recorded strong gains of S$22.3 billion as global markets continued to rally, S$13.8 billion of negative currency translation effects was incurred as the Singapore dollar strengthened against the US dollar and the Japanese yen.
This compared with the investment gain of S$30.1 billion made during FY2016/17, helped by higher investment returns and the depreciation of the Sing dollar against some major currencies.
Investment gains are inherently volatile, said MAS managing director Ravi Menon.
The best way to interpret the number is to look at the 10-year average (which is a) good judgment of the kinds of investment gains that MAS is making over a long-term period. Year to year, there will be fluctuations.
Over the last 10 financial years, investment gains, derived after stripping out currency translation effects, averaged S$12.1 billion per annum, according to the annual report.
At the end of March 2018, MAS held S$376.5 billion of OFR on its balance sheet. This is invested in a well-diversified portfolio, comprising different asset classes across various geographies, for good long-term returns and resilience across market conditions.
About three-quarters of the MAS' portfolio are denominated in the US dollar, euro, yen and British pound, with the greenback forming the bulk. Investment-grade bonds in the advanced economies form the largest allocation in the portfolio, said the central bank.
Source: NAM News Network