20-8-2023 (SINGAPORE) In a rare glimpse into the workings of the Singaporean government, the location and contents of the country’s top-secret gold vault have been revealed. The vault, which forms part of the official foreign reserves managed by the Monetary Authority of Singapore (MAS), is shrouded in secrecy. However, a recent documentary titled “Singapore Reserves Revealed,” produced by CNA, offered viewers a captivating look inside.
To ensure the utmost security, CNA reporters were blindfolded before being brought to the vault. Any GPS-tracking devices, including mobile phones, were confiscated to prevent the location from being revealed. The documentary footage showcased trays of neatly stacked gold bars, each tray capable of holding up to 20 bars worth approximately US$800,000 (S$1.08 million) each.
The visited vault houses a portion of the gold Singapore has been accumulating since it began purchasing the precious metal in 1968. The exact size of the room was not disclosed for security reasons. However, according to MAS statistics, Singapore has stockpiled a total of 222 tonnes of gold, which forms part of its official foreign reserves.
The value of gold becomes apparent when considering its density and worth. Luke Chua, CEO of BullionStar, a Singapore gold dealer, explained that even though the amount may seem underwhelming, gold’s density makes it a substantial asset. In fact, just one kilogram of gold can buy a second-hand car in Singapore. To put it into perspective, a 400-ounce gold bar (approximately 12.4kg) would be enough to comfortably purchase two five-room HDB flats in Singapore.
Gold has historically proven to be a reliable store of value, particularly during times of uncertainty and crisis. Chua emphasized that gold’s value shines when other reserve assets falter. Over the decades, state-owned gold has appreciated significantly. For example, Singapore initially purchased 100 tonnes of gold at US$40 per ounce, and it is now valued at US$2,000 per ounce. As of July 2023, the total value of gold in Singapore’s foreign reserves surpasses S$442 billion, according to MAS statistics.
While the gold vault serves as a striking symbol of Singapore’s wealth, it constitutes only a fraction of the country’s foreign reserves. Terence Ho, an economist from the Lee Kuan Yew School of Public Policy, explained in the documentary that foreign currencies form a substantial portion of the reserves. These currencies are essential for repaying international loans and covering imports, which account for over 90% of Singapore’s food supply. Ho suggested that the bulk of Singapore’s foreign currency holdings are in US dollars, commonly used for international trade settlements. Other currencies, such as the Euro, Japanese yen, Chinese yuan, and British pound, may also be part of the reserve basket.
Singapore’s reserves also comprise financial assets held by various entities such as MAS, Temasek Holdings, GIC, CPF, as well as cash, shares, bonds, private equity, financial instruments, companies, and land assets under JTC and HDB.
Prime Minister Lee Hsien Loong emphasized the importance of safeguarding the nation’s reserves, stating that they are not merely a “pot of gold” but a vital resource built up over generations to weather challenging times. The reserves act as a safety net for Singapore during crises.
The revealing documentary provides a fascinating insight into Singapore’s extensive reserves and the role gold plays in the country’s financial security. The video offers a unique perspective on the inner workings of Singapore’s government and its careful management of its wealth.
