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S’pore does not engage in currency manipulation, says MAS in response to US report

SINGAPORE — The Monetary Authority of Singapore (MAS) said that it does not manipulate the Singapore dollar for export advantage, or to achieve a current account surplus.

The Monetary Authority of Singapore said that Singapore’s monetary policy framework, which is centred on the exchange rate, has always been aimed at ensuring medium-term price stability, “and will continue to do so”.

The Monetary Authority of Singapore said that Singapore’s monetary policy framework, which is centred on the exchange rate, has always been aimed at ensuring medium-term price stability, “and will continue to do so”.

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SINGAPORE — The Monetary Authority of Singapore (MAS) said that it does not manipulate the Singapore dollar for export advantage, or to achieve a current account surplus.

The central bank’s statement was made on Wednesday (May 29) in response to media queries on a United States Treasury report released earlier in the day.

Singapore was among nine countries which had been highlighted for their currency practices in the twice-yearly report to the US Congress. Other countries in the watch list include China, Germany, Ireland, Italy, Japan, Malaysai, South Korea and Vietnam.

In its statement, MAS said that Singapore’s monetary policy framework, which is centred on the exchange rate, has always been aimed at ensuring medium-term price stability, “and will continue to do so”.

It added that a “deliberate weakening of the Singapore dollar would cause inflation to spike and compromise MAS’ price stability objective”.

The authority added that it manages the Singapore dollar nominal effective exchange rate (S$NEER) within a policy band, just as other central banks conduct monetary policy by targeting interest rates.

“Whether they target the exchange rate or the interest rate, central banks aim to keep consumer price inflation low and stable as their primary mandate,” MAS said.

RISE AND FALL OF CURRENT ACCOUNT BALANCE 

MAS also said that Singapore’s current account balance “should be viewed in context”, adding that in its early years of development, the country ran “persistently large current account deficits averaging close to 10 per cent of gross domestic product between 1965 and 1984”.

“As the economy matured, its investment needs tapered off, while national saving rose. Consequently, the current account turned into a surplus position,” MAS said.

But it added that, together with rising affluence that will raise consumption, Singapore’s current account surplus will be reduced when public and private savings are drawn down for the needs of an ageing population.

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