Chapter

SINGAPORE

Author(s):
International Monetary Fund. Monetary and Capital Markets Department
Published Date:
September 2004
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(Position as of December 31, 2003)
Status Under IMF Articles of Agreement
Article VIIIDate of acceptance: November 9, 1968.
Exchange Arrangement
CurrencyThe currency of Singapore is the Singapore dollar.
Other legal tenderSingapore and Brunei currency notes and coins are freely interchangeable at par without charge in Singapore and Brunei Darussalam.
Exchange rate structureUnitary.
Classification
Managed floating with no preannounced path for the exchange rateThe authorities manage the exchange rate as an intermediate target, allowing the Singapore dollar to fluctuate within an undisclosed target band. The stance of the exchange rate policy is announced every six months in the Monetary Policy Statement, typically in terms of changes to the slope of the policy band. The U.S. dollar is the intervention currency.
Exchange taxNo.
Exchange subsidyNo.
Forward exchange marketBanks may hedge their exchange risk through a forward foreign exchange transaction.
Arrangements for Payments and Receipts
Prescription of currency requirementsNo.
Payments arrangements
Regional arrangementsSingapore is a member of ASEAN.
Administration of controlSingapore has no exchange controls, although the Monetary Authority of Singapore (MAS) retains responsibility for exchange control matters.
International security restrictions
In accordance with IMF Executive Board Decision No. 144-(52/51)Measures have been taken to freeze accounts and the assets of, and block transactions with, listed individuals and organizations associated with terrorism. These measures were taken in accordance with the relevant UN Security Council resolutions.
In accordance with UN sanctionsSingapore observes the import and export prohibitions covered by the UN Security Council resolutions.
Payments arrearsNo.
Controls on trade in gold (coins and/or bullion)No.
Controls on exports and imports of banknotesNo.
Resident Accounts
Foreign exchange accounts permittedYes.
Held domesticallyYes.
Held abroadYes.
Accounts in domestic currency held abroadYes.
Accounts in domestic currency convertible into foreign currencyYes.
Nonresident Accounts
Foreign exchange accounts permittedYes.
Domestic currency accountsYes.
Convertible into foreign currencyYes.
Blocked accountsNo.
Imports and Import Payments
Foreign exchange budgetn.a.
Financing requirements for importsNo.
Documentation requirements for release of foreign exchange for importsNo.
Import licenses and other nontariff measuresA few imports are controlled for health, safety, or security reasons. Licenses are required for imports of rice.
Import taxes and/or tariffsVery few imports are subject to duty. Singapore is a party to the CEPT scheme for the AFTA. Customs duties are levied on imports of beer, stout, samsoo, and medical samsoo. Excise duties are levied on imports of liquor, tobacco, petroleum, and automobiles.
State import monopolyNo.
Exports and Export Proceeds
Repatriation requirementsNo.
Financing requirementsNo.
Documentation requirementsNo.
Export licenses
Without quotasExport licenses are required for certain items, such as substances that deplete the stratospheric ozone layer and rubber.
With quotasCertain exports (e.g., textiles and clothing) are subject to quantitative restrictions and other nontariff barriers in effect in importing countries.
Export taxesn.a.
Payments for Invisible Transactions and Current Transfers
Controls on these transfersNo.
Proceeds from Invisible Transactions and Current Transfers
Repatriation requirementsNo.
Restrictions on use of fundsNo.
Capital Transactions
Controls on capital transactionsYes.
Controls on capital and money market instruments
On capital market securities
Shares or other securities of a participating nature
Sale or issue locally by nonresidentsNonresidents may issue equity shares. When the Singapore dollar proceeds of an initial public offering are to be used offshore, these proceeds must be converted into foreign currency before their remittance abroad.
Bonds or other debt securities
Sale or issue locally by nonresidentsNonresidents may issue bonds. When the Singapore dollar proceeds are to be used offshore, they must be swapped or converted into foreign currency before their remittance abroad. All rated and unrated foreign entities are allowed to issue Singapore dollar bonds. In the case of unrated foreign entities, the investor base is restricted to sophisticated investors only.
Controls on derivatives and other instrumentsNo.
Controls on credit operations
Financial credits
By residents to nonresidentsYes.
Controls on direct investmentNo.
Controls on liquidation of direct investmentNo.
Controls on real estate transactions
Purchase abroad by residentsYes.
Purchase locally by nonresidentsForeign investment in residential and other properties, including vacant land, landed residential property, and residential property in a building of less than six stories, requires government approval. Foreigners may, however, freely purchase residential units in buildings of six or more stories and in approved condominium developments, excluding public housing. Development of land for residential purposes that has been zoned or approved for industrial or commercial use also requires government approval.
Controls on personal capital transactionsNo.
Provisions specific to commercial banks and other credit institutions
Lending to nonresidents (financial or commercial credits)Singapore’s policy of discouraging the internationalization of the Singapore dollar has eased significantly in recent years, and only two policy restrictions remain. First, financial institutions in Singapore may not extend Singapore dollar credit facilities exceeding S$5 million to any nonresident financial entity for speculative activities in the foreign exchange market. Singapore dollar facilities include loans, contingent credit lines, and foreign exchange swaps involving a spot sale of Singapore dollars to a nonresident in a first leg. Second, nonresident financial entities must convert Singapore dollar proceeds obtained from Singapore dollar loans, equity listings, or bond issuance into foreign currency before using them to finance activities outside of Singapore.
Differential treatment of deposit accounts in foreign exchange
Reserve requirementsForeign currency deposits of ACU member banks accepted by domestic banks are not subject to reserve requirements.
Liquid asset requirementsForeign currency deposits of ACU member banks accepted by domestic banks are not subject to the liquid asset requirement.
Open foreign exchange position limitsNo limits are set by the MAS, but it reviews the internal control systems of banks to ensure that adequate limits and controls are established for treasury activities.
Provisions specific to institutional investorsInsurers may include only 30% of their foreign currency–denominated and overseas assets as the part of their admitted assets that goes into the calculation of the solvency of the fund. Of this, 10% must be foreign currency deposits with an approved financial institution, foreign currency fixed-income securities graded AA and above, and equities listed on any stock exchange. Insurers may include an additional 10% of foreign currency–denominated fixed-income assets that are fully hedged to the Singapore dollar as admitted assets. Insurers are allowed to invest assets in relation to the currency of their liabilities.
Limits (max.) on securities issued by nonresidentsYes.
Limits (max.) on investment portfolio held abroadYes.
Currency-matching regulations on assets/liabilities compositionYes.
Other controls imposed by securities lawsNo.
Changes During 2003
No significant changes occurred in the exchange and trade system.

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