Buying rush after pound plunges

Crowds flocked to money changers in Raffles Place hoping to snap up sterling cheaply after the rate plunged.
Crowds flocked to money changers in Raffles Place hoping to snap up sterling cheaply after the rate plunged.ST PHOTO: KEVIN LIM

As news of Britain's decision to exit the European Union broke yesterday around lunchtime, Singaporeans flocked to money-changing hub The Arcade to compare exchange rates for the weakened sterling.

While the British pound dived to $1.80 at one point yesterday, the rates at the counters in Raffles Place reflected that of the previous day - between $1.915 and $1.99.

Still, queues formed at counters offering cheaper rates, and at least one money changer ran out of sterling by 2pm.

Among those in line were Singaporeans with plans to travel to Britain for a holiday or who are funding their children's education there.

"I'm changing about $4,000 for a holiday to Southampton next month," said retired architect David Wee, 70, who was among dozens in a queue at Raffles Money Change, where the pound was $1.92.

"It might drop further, but I don't think it will save me much."

British citizen Edward Pank, 45, who said he was "devastated" by Britain's decision, was in line to change $2,000 worth of euros and pounds before his flight to London last night. The weakened sterling was cold comfort to him.

"There is all sort of uncertainty for the EU and what the future holds for the United Kingdom. I'm worried that Scotland will break away, and it'll lead to the break up of the UK," said the managing director of an advertising research firm.

The news also unsettled money changers, with several choosing to stop trading sterling until next week. Others sold their old stock of pounds at the previous day's rates.

"Even though the interbank rates were low, the banks were selling to us at a high rate," said the president of the Money Changers Association, Mr Omar, who cleared his stock of pounds on Thursday at a rate of $1.94 and did not buy any yesterday.

"If I'd held on to £10,000, I would've lost $1,000 today," said Mr Omar, 55, who goes by one name. "If I don't trade, I won't earn, but I also won't lose."

Elsewhere, consumers took advantage of the tumbling pound to shop on British sites such as online fashion retailer Asos, which reportedly crashed after heightened demand yesterday.

A version of this article appeared in the print edition of The Straits Times on June 25, 2016, with the headline 'Buying rush after pound plunges'. Print Edition | Subscribe