MTI downplays effect of SGD depreciation on local economy

US strength will provide an overall boost.

The Ministry of Trade and Industry stated that the Singapore dollar’s weakness will not have a significant impact on Singapore’s economy.

Minister Lim Hng Kiang stated in a reply to parliament that the MAS’s exchange rate framework allows the Singapore dollar to be managed against short-term market fluctuations, while limiting the spill-overs that exchange rate volatility may have on the real economy.

“It is also important to note that the exchange rate is not used as a tool to directly manage Singapore’s export competitiveness in the short term. Instead, demand conditions in our major export markets would have a more significant impact on Singapore’s growth prospects. We expect the strengthening of the US economy, which underpins the appreciation of the US dollar, to bode well for the Singapore economy,” he stated.