Stronger Singapore dollar not expected to hit exports significantly: Alvin Tan 

THE strengthening of the Singapore dollar is not expected to have a significant negative impact on Singapore’s exports, said Minister of State for Trade and Industry Alvin Tan in Parliament on Monday (May 9). 

Replying to a question from Member of Parliament Desmond Choo about the strengthening Singdollar’s likely impact on exports, Tan noted that growth in Singapore’s non-oil domestic exports remained firm in the first quarter of 2022.

“Singapore’s exports are primarily dependent on demand rather than our exchange rate,” said Tan, adding that a Singapore Economic Development Board survey on business expectations showed that the Singapore dollar exchange rate is not a key limiting factor for export orders of manufacturing firms.

“Singapore’s exports are generally high value-added products and services, where demand is less sensitive to price, and therefore exchange rate changes,” he said.

The Monetary Authority of Singapore has tightened policy 3 times since October 2021, allowing for the Singdollar’s appreciation. Such strengthening of the Singapore dollar is necessary to dampen inflation and to help preserve the purchasing power of businesses and households, said Tan, noting that this helps to reduce the input costs faced by Singapore’s export industries as well.

In response to a further question on how the strengthening of the Singdollar will affect Singapore’s gross domestic product growth forecast, Tan said that MAS’s monetary policy stance is consistent with growth being within the official forecast range of 3 to 5 per cent.