The pound has fallen to a historic low against the Singapore dollar.
The exchange rate on Sep. 22, 2022 hit a low of £1 to S$1.594, before recovering slightly.
Value of pound fell the past year
The pound has been falling against the Singapore dollar the past year, following precipitous dips in August 2019 and March 2020, that saw swift rallies.
Overall, the pound has fallen 12.86 per cent against the Singapore dollar in the past 12 months, in tandem with the pound performing poorly against the US dollar.
The pound has fallen 16.75 per cent against the US dollar in the past year -- from US$1.361 to US$1.133 -- and is at the lowest level against the dollar since 1985.
This is the first time the pound had fallen below the US$1.14 mark in nearly four decades.
The pound has fallen by more than 47 per cent against the Singapore dollar over the last 15 years.
In September 2007, £1 was S$3.03.
Why is value of pound falling?
The BBC explained that the decline in the pound reflects concerns over the UK economy, as soaring prices and rising energy costs squeeze budgets.
The fall in the value of the pound's value is driven in large part by weak retail sales, high prices and soaring energy costs in the UK, BBC also said.
The cost of living is rising at its fastest rate in 40 years, with food, fuel and energy prices all up.
BBC further explained that the pound's value falling or rising means it can buy more or less of a foreign currency because the exchange rate has changed.
And the pound is very often compared to the US dollar, given the huge size of the American economy.
US dollar strengthening
Every major currency has retreated against the US dollar this year, with the Federal Reserve set on an aggressive rate hike cycle, Bloomberg reported.
The Singapore dollar is only down more than 4 per cent against the greenback this year, performing relatively better than its Asian peers.
Singapore dollar resilient
Bloomberg also reported that the Singapore dollar has established itself as Asia's most resilient currency against the US dollar in 2022.
The bet is that the Singapore dollar will continue to strengthen if inflation forces the Monetary Authority of Singapore (MAS) to tighten its exchange rate policy again in October 2022.
MAS is expected to extend policy tightening at its October meeting to help rein in core inflation that hit a 14-year high in July.
Top photo via Google & Unsplash