Local money continued to devalue in May against the currencies of Macau’s major trading partners such as China, Japan and Europe, helping the city’s exporters. According to the Monetary Authority of Macau (AMCM) the trade-weighted effective exchange rate index for the pataca – an index that compares the value of the pataca against a basket of currencies of its major trading partners – reached 103.77 points last month. That’s the second straight month of decrease. The index dropped by 1.09 compared to April but was 6.51 points higher than a year ago. With the local currency pegged to the US dollar via the Hong Kong dollar, in the last year the pataca has seen a record rebound in its value against gobal heavyweight currencies such as the yuan (China), yen (Japan) and the euro (European Union), with these also the currency of some of the city’s major trading partners. The recovery of the US economy combined with the economic stimulus measures launched in China, Japan and Europe (like pumping money into the economy and devaluing its currencies) enabled the US dollar to embark upon an upward spiral pulling the Hong Kong dollar and pataca with it. Despite the fall in May, the city’s currency is still trading at its peak level since five years ago. The May figure was the fourth highest recorded since January 2010, AMCM data shows. The May breakdown for each foreign currency is currently not available but in April – the first drop in the index exchange rate – the pataca lost ground to the euro, UK pound, yen and yuan. AMCM also announced yesterday that foreign reserves went up by 1.3 per cent in May to MOP139.1 billion from the revised value of MOP137.3 billion recorded in the previous month. The city’s foreign exchange reserves represent 12 times the currency in circulation.
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