Sterling's drop in value spells savings for some

Analyst expect the referendum to have an immediate effect on markets, especially on the sterling. PHOTO: BLOOMBERG

The sterling's recent drop has so far helped bank worker C.C. Tham save $3,500 on her daughter's school fees and rent in Britain - and the 48-year-old is hoping it will fall further if the country opts to leave the European Union in today's referendum.

Over the past week, money changers have seen a 20 to 40 per cent increase in sales of the pound, which has depreciated by more than 10 per cent against the Singapore dollar since August last year. The Singdollar hovered at around 1.97 to the pound yesterday, compared to 2.11 a year ago.

Analyst expect the referendum - the result of which is due tomorrow afternoon in Singapore - to have an immediate effect on markets, especially on the sterling.

In the event of a Brexit, the pound is expected to weaken to as low as $1.818, according to National Australia Bank's senior markets strategist Julian Wee. If Britain remains in the European Union, the pound could rise to as high as $2.12 against the Singdollar, he added.

Mrs Tham, who is paying for her daughter's four-year degree at the University of Edinburgh, bought about £20,000 at a rate of 2.154 last August. In March, she bought another £20,000 at a rate of 1.987.

"The amount I saved can pay for two or three air tickets for my daughter," said Mrs Tham. "I'm monitoring the rate and come Friday, I'll look at it again."

Clifford Gems owner Mohamed Rafeeq, 51, noted that most buyers are Singaporeans paying for their children's British school fees or going on holiday to Britain.

The president of the Money Changers Association, Mr Omar, 55, who goes by one name, said: "It's an uncertain time for money changers, especially those who bought more of the pound when it was low and are waiting for it to go up."

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A version of this article appeared in the print edition of The Straits Times on June 23, 2016, with the headline Sterling's drop in value spells savings for some. Subscribe