MAS stands ready to provide liquidity in times of global stress: Tharman
SINGAPORE’S central bank is ready to provide liquidity to ensure that the country’s financial system remains stable, and that financial markets continue to function “in an orderly manner” in times of global stress, said Senior Minister Tharman Shanmugaratnam on Wednesday (Apr 12).
The Monetary Authority of Singapore (MAS) will seek to “safeguard the safety and resilience” of the financial sector amid the volatile international financial markets and stresses in global banking, said Tharman, who is minister-in-charge of MAS.
“Through regular risk assessments and close supervisory monitoring, MAS ensures that banks in Singapore are well-capitalised, keep healthy liquidity positions, and are underpinned by a stable and diversified funding base,” he said.
He added that the central bank reviews banks’ regular internal stress tests against interest rate, credit and other risks. In addition, it also conducts an annual industry-wide stress test of key financial institutions in Singapore.
Tharman was one of four ministers who released their addenda to the President’s Address, which was delivered by President Halimah Yacob in Parliament on Monday.
Tharman said that major central banks have increased interest rates at an “unprecedented pace” amid persistent inflationary pressures. While tighter financial conditions globally are helping to dampen inflation, economic growth is slowing and financial market stresses are rising, he said.
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“Downside risks to global growth have increased, even as continuing labour market pressures keep inflation elevated,” he said. “Against this backdrop, the Singapore economy will expand at a slower pace in 2023. Inflation is expected to moderate during the year but will remain higher than the historical norm.”
He noted that MAS has tightened monetary policy since October 2021 and this has helped to dampen inflation and anchor inflation expectations. He said that the central bank will continue to focus on ensuring medium-term price stability as the basis for sustained economic growth.
MAS will also continue to build competencies in growth areas, provide training support for finance professionals at different stages of their careers, and develop specialist talent in areas such as sustainability and technology, said Tharman.
There is an ongoing plan for the financial services sector to achieve net jobs creation of 3,000 to 4,000 per year, over a five-year period from 2021 to 2025.
In his addendum, Trade and Industry Minister Gan Kim Yong gave his commitment to drive economic growth and create good jobs.
He said that Singapore must continue to remain open, expand its economic space and stay connected to global growth opportunities. This includes expanding and diversifying trading activities and markets, capturing more re-exports and transhipments, and embedding Singapore deeper into global supply chains.
“This strengthens our relevance as a global business hub and anchors high-value economic activities and good jobs here,” he said.
He added that the ministry will strengthen international partnerships to capture new opportunities, arising from Asia’s growth and global trends in digital trade and sustainability.
The Ministry of Trade and Industry will also work with industry stakeholders to support businesses to transform and workers to upskill to seize opportunities.
This includes deepening enterprises’ research and development capabilities and capacity for market-oriented innovation, streamlining regulations and improving service delivery, and helping promising enterprises internationalise.
Likewise, the Ministry of Communications and Information (MCI) will continue to support digital transformation of businesses, especially small and medium-sized enterprises in improving their productivity and accessing new markets, said Minister for Communications and Information Josephine Teo.
She said MCI will scale adoption of digital utilities that support core business functions, such as e-payment and e-invoicing. The ministry will continue to help workers upskill and deepen their proficiencies in high-demand areas such as 5G, artificial intelligence (AI) and cybersecurity.
MCI will also expand its digital inclusion efforts, ranging from providing subsidised devices and internet access to offering training and assistance for the elderly and other groups.
Deputy Prime Minister Heng Swee Keat, who is chairman of the National Research Foundation (NRF), gave his commitment to advance Singapore’s capabilities in strategic technology areas such as the semiconductor sector.
Noting the transformative potential of AI, he added that the foundation will continue to attract top AI talent and spur the development of innovative AI solutions that generate value for businesses and society.
To build more locally grown, high-growth and globally competitive companies, NRF will continue to provide customised financial support for promising enterprises to build sustained research and development, and innovation capacity, said Heng.
Heng, describing this as part of the “next phase” of the Singapore Global Enterprises Initiative, noted a more than 20-fold increase in venture capital funding raised here, from about S$500 million in 2011 to about S$11 billion in 2022.
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