BT Explains: Has MAS policy tightening hurt Singapore exports?

HAS Singapore’s export competitiveness been hurt by the strong Singapore dollar appreciation in recent years, and was this enabled by the tightening of monetary policy?

In response to such concerns, the Monetary Authority of Singapore’s (MAS) stance is that export weakness has other causes – and even if it had not raised the nominal exchange rate, the Singapore dollar would effectively still have appreciated in real terms.

The difference is that this would have been driven by “increases in relative prices”, with domestic prices rising further than foreign prices. This would have meant a “significant cost” to businesses and households, MAS chief economist Edward Robinson said at the JPMorgan Asia Macro Conference on Wednesday (Mar 6).