Singapore to earmark 33 bln USD for long-term investment
SINGAPORE, May 9, 2019 (BSS/Xinhua) – The Monetary Authority of Singapore (MAS) said Wednesday that it would be transferring 45 billion Singapore dollars (about 33 billion U.S. dollars) from the official foreign reserves (OFR) to the government for longer-term investment.
This amount is “the excess over what MAS deems necessary to maintain confidence in Singapore’s exchange rate-centered monetary policy,” said a statement issued by MAS, which is the central bank of the Asian country. It added that Singapore’s monetary policy is aimed at ensuring medium-term price stability.
According to the statement, Singapore’s OFR stood at 404 billion Singapore dollars as of April 2019, which has grown steadily over the years and amounted to 82 percent of the GDP as of the first quarter of 2019.
Acknowledging that the OFR plays an important role in MAS’ conduct of monetary policy, MAS deemed in its latest review that it should maintain OFR amounting to at least 65 percent of GDP on an ongoing basis.
“This level of OFR will provide a sufficiently strong buffer against stresses in the global economy and markets, and underpin confidence in Singapore’s exchange rate-centered monetary policy,” said the statement.
As the current level of OFR is in excess of that required by MAS, MAS will therefore transfer in May 45 billion Singapore dollars to the government for management by GIC Private Limited, so as to be invested on a longer-term basis with expected higher returns.
The statement noted that in the event of an extreme adverse scenario, the foreign reserves held by the government are also available to ensure that MAS’ operations are not compromised.