Measures to support local businesses, given the impending RTS Link, will be announced later
[SINGAPORE] The Singapore dollar has appreciated against the ringgit at an average rate of 1.3 per cent, over 2020 to 2025, Minister of State for Trade and Industry and Monetary Authority of Singapore (MAS) board member Alvin Tan said in Parliament on Friday (Mar 6).
He was responding to a question from Yio Chu Kang SMC Member of Parliament Yip Hon Weng, who asked about factors contributing to the Singdollar’s “persistent weakness” against the ringgit, the implications of a “sustained slide” below the exchange rate of three ringgit per Singdollar for Singapore’s labour market, and whether MAS will consider adjusting its monetary policy settings to ensure stability.
The ringgit has strengthened against the Sing dollar and to a record high against the US dollar in recent months.
But Tan emphasised that MAS manages the Singdollar against a trade-weighted basket of currencies of its major trading partners, and not against any bilateral exchange rate.
The Singdollar trade-weighted exchange rate has been on a gradual appreciating path since October 2021, he pointed out, adding that the strength and stability of the currency is “assessed against the attainment of medium-term price stability in the economy”.
He also acknowledged that non-resident labour flows into Singapore “principally reflect the economy’s overall growth and employment prospects”.
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MAS will continue to monitor economic and financial developments closely, and remains prepared to adjust monetary policy when needed, he said.
Yip also asked a supplementary question about support measures for local business, given the potentially reduced demand for Singapore’s retailers and food and beverage outlets, as a result of the upcoming Johor Bahru-Singapore Rapid Transit System (RTS) Link set to launch this year, coupled with a weaker Singdollar.
Tan – who chairs the RTS Link Task Force and noted a task force meeting on Friday morning – pointed to enhancements to grants and support schemes for heartland businesses, and added that the task force is looking at the challenges and opportunities afforded by the RTS.
“We have met with the merchants, we have met with government officials, including Enterprise Singapore and HDB (Housing & Development Board) and NEA (National Environment Agency) this morning, and we will announce these measures in due course.”
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