According to Bloomberg, investors interested in withdrawing from the dollar market are considering buying securities issued by the HKMA. According to data compiled by Bloomberg, if currency hedging costs are taken into account, the three-month MAS notes yield is about 13 basis points higher than U.S. Treasury bonds during the same period.
DBS interest rate strategist Liao Yuming pointed out that the AAA rating of Singapore government bonds and the government's cautious way of managing finances are attractive to investors who are interested in diversifying their investments.
The tariff policy implemented by US President Trump has caused an uproar in the financial market. In addition, the international credit rating agency Moody’s downgraded the US sovereign credit rating from the highest "Aaa" to one level to "Aa1", which has allowed investors to reevaluate the role of the US dollar in the global economic system.
US investors can convert US dollars into SGD in the spot market and sell SGD in the forward market.
Among all Asian countries, Singapore has become a popular investment location because it has obtained the AAA credit rating of S&P Global Rating.
The decline in US Treasury bond ratings has caused investors to focus on Asian countries with excellent credit ratings, among which bonds issued by the Monetary Authority of Singapore are the most popular.
Singapore has gradually expanded the size of the bond market. According to data collected by Bloomberg, the total amount of outstanding notes of the HKMA climbed to 345.5 billion yuan, a record high.