Singapore’s dollar retreated from a record high on speculation the central bank will intervene to slow the pace of the currency’s gains.

The city-state’s dollar rose as high as $1.3443 against its U.S. counterpart today, the strongest level since at least 1981, when Bloomberg started tracking the data. The Monetary Authority of Singapore conducts monetary policy by guiding its dollar within an undisclosed band of trade-weighted currencies of major trading partners. The MAS made an unprecedented one-off revaluation in the Singapore dollar in April and said it would target further appreciation.

 

“We are well over the intervention threshold of the currency band,” said Wai Ho Leong, a regional economist at Barclays Plc in Singapore. “People are still very positive about the prospects in Singapore, which continues to attract foreign direct investment as well as inflows into stocks and property.”

 

The currency traded at $1.3464 versus the U.S. dollar as of 10:06 a.m. in Singapore, little changed from $1.3467 in Asian trading yesterday, according to data compiled by Bloomberg. It has gained 4.1% this year, the fourth-best performer among the 10 most-active regional currencies excluding the yen.

 

The Singapore dollar may need to weaken to at least S$1.3500 to return to the central bank’s undisclosed trading band, Leong said. The authorities have yet to intervene in the currency market although traders are expecting it to do so, he added.

 

Singapore’s gross domestic product increased 17.9% in the first half, the fastest pace since records began in 1975, and is poised to become the fastest-growing economy in the world this year.