Shoppers rein in spending on US goods as Singdollar weakens

Shopping online for goods in the United States has suddenly become pricier for consumers here after regulators moved to curb the appreciation of the Singdollar.

The surprise decision by the Monetary Authority of Singapore on Thursday has already sent the greenback higher, making those products on look a little less of a bargain.

The Singdollar fell by as much as 1.2 per cent against the US dollar yesterday before strengthening to about $1.358.

It was the biggest one-day decline since Nov 6 last year. Analysts expect further declines.

That spells bad news for re- tailers in the US servicing online consumers here, but better news for local shops.

Public relations consultant Claire Yong, 30, usually shopped for household and baby products on Amazon, but will buy locally now.

"I used to buy on US-based websites like Amazon because similar items cost less online than in local stores. But if the currency weakens, I will just buy them locally, and enjoy the added bonus of not needing to wait for the items to arrive."

Mr Marcus Liang, a 25-year-old operations analyst, said he would rethink big-ticket items. "As holidays cost a fair bit more than daily spending, I will probably avoid going to the US for the time being," he added.

Mr Lawrence Linker, chief executive officer of MBA consultancy MBA Link, said the strengthening US dollar over the past year was prompting more applicants to consider European business schools.

"Cost-conscious applicants have always been interested in MBAs from European schools, which are typically shorter and cheaper. With the US dollar strengthening, it's almost like the European MBAs are on sale," he noted.

" But for some, the top US schools will be desirable at any price point."

The weakening Singapore dollar has triggered fears that imported goods will be pricier, but Mr Brian Tan, economist for South-east Asia at Nomura, said prices of goods may not necessarily go up.

"A weaker SGD does make imports more expensive but the question is whether companies will pass on the extra cost to consumers. Commodity prices are a bigger factor and with low oil prices, overall imported inflation will remain quite weak," Mr Tan added.

Mr Rahul Mudliar, the director of his own financial services company, said he would reconsider spending on imported goods.

"If my iPhone costs $50 more, I might keep away from buying it for now. The move is too small for me to change my spending habits now, but I might buy less US-made goods, perhaps a Samsung instead of an iPhone."

This article was first published on April 16, 2016.
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