Singapore: Selected Issues
Author: International Monetary Fund. Asia and Pacific Dept
Publication Date:
28 Jul 2017
eISBN:
9781484312858
Language:
English
Keywords:
ISCR; CR; Singapore; private sector; bank; private saving; Singapore dollar; flows to Singapore; open economy; Singapore's position; house price surge; Global financial crisis of 2008-2009; Currencies; Macroprudential policy instruments; Global
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Selected Issues

Abstract

Selected Issues

Capital Flows to Singapore: Macroeconomic Implications and Policy Responses1

Singapore is a highly financially open economy that has evolved into a competitive regional and international financial hub. The country records large cross-border capital flows, which are highly sensitive to external conditions, but has managed to avoid financial and real crises in the face of external financial shocks. This paper examines the resilience of Singapore’s economy by analyzing its experience in managing the untoward consequences of capital flows through the use of different macroeconomic and macroprudential policy tools.

A. Introduction

1. Singapore is a highly financially open economy that has evolved into a competitive regional and international financial hub. Its stock of external assets and liabilities (excluding official reserve assets) has increased dramatically over the years, doubling from about 220 percent of GDP in the 1980s to 560 percent of GDP in the 1990s, and further rising to over 1600 percent of GDP in the 2000s (Figure 1). The country records large cross-border asset flows (i.e., the acquisition of external assets by domestic residents), as well as liability flows (i.e., the acquisition of domestic assets by nonresidents), but has been experiencing persistent capital outflows on a net basis that correspond with its current account surplus (Figure 2).2

Figure 1.
Figure 1.

Singapore: Stock of External Assets and Liabilities in Singapore and Other Selected Countries

Citation: IMF Staff Country Reports 2017, 241; 10.5089/9781484312858.002.A005

Figure 2.
Figure 2.

Singapore: Net Financial, Asset, and Liability Flows to Singapore

Citation: IMF Staff Country Reports 2017, 241; 10.5089/9781484312858.002.A005

2. In terms of the composition of flows, liability flows are dominated by foreign direct investment (FDI) and other investment flows, while asset flows are dominated by portfolio and other investment flows (Figure 2). In general, Singapore experiences net inflows of FDI—much of which is concentrated in the financial, manufacturing, and wholesale and retail trade sectors—that is a more stable type of capital flow, while experiencing net outflows of portfolio investment and other investment (pre-dominantly cross-border bank flows reflecting loans and deposits), which tend to be more volatile forms of capital flows (Figure 3).

Figure 3.
Figure 3.

Singapore: Volatility of Net Financial Flows to Singapore

Citation: IMF Staff Country Reports 2017, 241; 10.5089/9781484312858.002.A005

3. Given Singapore’s position as a global financial center, capital flows to Singapore are strongly related to external conditions. External factors (such as global risk appetite, commodity prices, US real government bond yields, and real output growth in advanced economies) together account for some 42–54 percent of the variation in asset and liability flows (Table 1; cols. [2]-[3]).

Table 1.

Singapore: Financial Flows and Global Factors, 1995-2016

article image
Notes: Column headers indicate dependent variables in percent of GDP (three-quarter moving average). Flows are represented in BPM5 terms with positive values indicating “inflows” and negative values indicating “outflows.” Real GDP growth rates and real US govt. 10-year bond yield are in percent. Real GDP growth rate in advanced countries is export weighted. Constant and quarter effects are included in all specifications. Robust standard errors are reported in parentheses. *, **, and *** indicate statistical significance at the 10, 5, and 1 percent levels, respectively.

4. The impact of these factors on asset and liability flows, however, tends to go in opposite directions, suggesting that domestic residents’ net acquisition of assets abroad generally offsets changes in non-resident net acquisition of domestic assets. Thus, asset flows are positively related to the VIX index (a common proxy for global market volatility and risk aversion), indicating retrenchment by domestic residents when global risk aversion rises, while liability flows are negatively related to the VIX index, implying a decline in flows by foreign investors with a rise in risk aversion. An increase in commodity prices and real GDP growth rate of advanced economies raises foreign investment in Singapore, but also encourages investment abroad. The effect of China’s economic outlook appears to be statistically insignificant when looking at aggregate asset and liability flows, but disaggregated data show that outward FDI and inward portfolio investment flows increase significantly with China’s output growth (Table 2).3

Table 2.

Singapore: Financial Flows by Type and Global Factors, 1995-2016

article image
Notes: Column headers indicate dependent variables in percent of GDP (three-quarter moving average). Flows are represented in BPM5 terms with positive values indicating “inflows” and negative values indicating “outflows.” Real GDP growth rates and real US govt. 10-year bond yield are in percent. Real GDP growth rate in advanced countries is export weighted. Constant and quarter effects are included in all specifications. Robust standard errors are reported in parentheses. *, **, and *** indicate statistical significance at the 10, 5, and 1 percent levels, respectively.

5. The offsetting movement in asset and liability flows is the reason for Singapore’s generally stable net financial flows. Overall, the (unconditional) correlation between net financial flows and liability flows is negative, while that between net financial flows and asset flows is positive and more than twice as large, suggesting that domestic residents play a dominant role in determining the dynamics of net flows in Singapore. Looking at the behavior of flows in Figure 2, and the results reported in Table 1, it is apparent however that the country receives more liability flows when global economic and financial conditions are benign, but greater asset flows when the global financial cycle turns.4

6. Notwithstanding the large cross-border capital flows, and their sensitivity to global factors, Singapore has managed to avoid financial and growth crises when external financial conditions have deteriorated. During the Asian financial crisis, e.g., Singapore’s real GDP declined by about 2 percent as compared to an average decline of 6 percent experienced by other countries in the region (Figure 4). More recently, during the global financial crisis, Singapore had one of the smallest output declines and the sharpest economic recoveries among other global financial centers.

Figure 4.
Figure 4.

Singapore: Real GDP Growth in Singapore and Selected Countries, 1990–2016

Citation: IMF Staff Country Reports 2017, 241; 10.5089/9781484312858.002.A005

7. What makes Singapore so resilient to capital flow volatility? This paper examines this question by analyzing Singapore’s experience in managing capital flows through different policy tools—monetary, exchange rate, fiscal, prudential, and capital controls.

B. Challenges and Policy Response

8. Capital flows can bring myriad benefits (efficient allocation of resources, risk sharing, intertemporal consumption smoothing, financial market development), yet they can also pose macroeconomic and financial risks. The vulnerabilities associated with capital inflows (such as economic overheating; currency overvaluation; credit and asset price booms; balance sheet mismatches) can contribute to the occurrence of a financial crisis when flows ultimately recede.5 In the context of Singapore, the liberalization of the capital account in the 1970s helped to reap the many benefits of financial openness and catalyzed its evolution into a global financial center. Yet, the cyclical variation in flows has also posed some challenges. The snapshot in Figure 5, for instance, shows that capital flows—especially liability (nonresident) flows—are strongly positively associated with inflation, credit growth, and asset (house and equity) prices in Singapore—suggesting that variations in foreign flows can potentially create domestic economic and financial volatility.6

Figure 5.
Figure 5.

Singapore: Financial Flows, Inflation, and Financial Vulnerabilities

Citation: IMF Staff Country Reports 2017, 241; 10.5089/9781484312858.002.A005

Source: IMF staff estimates.Note: Variables are three-quarter moving averages computed over 1995Q1-2016Q3. All regressions include quarter fixed effects. Robust standard errors are computed. *,**, and *** indicate statistical significance at the 10, 5, and 1 percent levels, respectively.

9. The authorities have, however, remained vigilant to these risks. Over the years, the authorities have pursued a multi-pronged approach to mitigate the untoward consequences of capital flows—deploying policy tools targeting specific risks. They have thus relied predominantly on monetary and fiscal policies to address macroeconomic concerns, and on macroprudential measures to mitigate the financial-stability risks stemming from capital flows.7

Monetary Policy

10. The core of the authorities’ approach to dealing with the macroeconomic concerns associated with capital flows is the exchange rate-centered monetary policy. Monetary policy in Singapore operates under a “basket-band-crawl” system—under which the Monetary Authority of Singapore (MAS) manages the value of the domestic currency against a basket of currencies within a prescribed policy band centered at a parity. The parity is allowed to adjust in line with economic fundamentals, with the policy band adjusted in tandem.

11. Within this “basket-band-crawl” exchange rate policy framework, Singapore’s nominal and real effective exchange rates have steadily appreciated, but the central bank has allowed short-run fluctuations in the value of the currency to stabilize inflation and output. The (unconditional) correlation between liability flows and the nominal and real effective exchange rates (NEER and REER, respectively) is thus strongly positive (Figure 6), suggesting that the MAS allows the currency to appreciate during inflow episodes to mitigate inflationary pressures, and lets it depreciate when liability flows recede (which as shown in Table 1 generally corresponds with a downturn in global economic activity with implications for domestic economic growth).8 During the foreign inflow surge prior to the Asian financial crisis, for instance, the NEER and REER appreciated by about 12 percent and 8 percent, respectively, while in the runup to the global financial crisis, the NEER and REER appreciated by about 10 percent and 8 percent, respectively. Conversely, amid falling foreign inflows and recessionary pressures during the Asian crisis, the NEER and REER depreciated by about 4.5 and 10 percent over 1997Q1-1999Q1, respectively. Similarly, at the peak of the global financial crisis (2008Q3-2009Q1), both the NEER and REER were allowed to depreciate.9

Figure 6.
Figure 6.

Singapore: Liability Flows and Macroeconomic Policy Response, 1995–2016

Citation: IMF Staff Country Reports 2017, 241; 10.5089/9781484312858.002.A005

12. Tracing the MAS’ monetary policy stance through its Monetary Policy Statements, it is apparent that monetary policy reacts nimbly to changes in the external environment that may impact domestic economic activity. Thus, various forms of adjustments are made to the exchange rate policy through, e.g., changes to the width, slope, and re-centering of the exchange rate band (Figure 7). Within its managed floating framework, however, the MAS also intervenes to dampen excessive volatility in the exchange rate, as is evident from the positive correlation between foreign reserve flows (positive values indicating reserve accumulation) and liability flows (Figure 6). Thus, abrupt large changes in the exchange rate are prevented, while the impact of intervention on domestic liquidity is managed through money market operations (foreign exchange reverse swaps, lending to or borrowing from banks, purchase or sales of government securities and repurchase agreements).10 With the use of such operations, the MAS is able to inject or drain liquidity from the domestic financial system quickly, thereby fostering orderly money market conditions (Chow, 2008).

Figure 7.
Figure 7.

Singapore: NEER and Monetary Policy Stance

Citation: IMF Staff Country Reports 2017, 241; 10.5089/9781484312858.002.A005

Sources: Monetary Authority of Singapore; and IMF, Information Notice System (INS).

13. Being a fully open economy, the use of the exchange rate as the intermediate target of monetary policy implies giving up control over domestic interest rates (as postulated by the Mundell-Fleming “trilemma”). Broadly speaking, therefore, interest rates in Singapore have moved in tandem with the U.S. interest rates—though typically staying below the U.S. rates reflecting market expectations of a trend appreciation of the Singapore dollar. Nevertheless, given that the central bank permits some flexibility in the exchange rate, it can exert a limited degree of control over domestic interest rates by varying the amount of liquidity re-injections (injecting less liquidity into the market when the economy is considered to be overheating, and more when it is under performing). This appears to be reflected in the small but positive correlation between short-term interest rates and liability flows in Figure 6.

Fiscal Policy

14. The central bank’s swift and flexible monetary policy response to capital flows is aided by a responsive fiscal policy. While the government pursues a highly prudent approach to fiscal management (the fiscal balance to GDP ratio has averaged about 7 percent over 1995–2016), it has been adjusting fiscal policy to deal with large shocks.11 During the Asian financial crisis, for example, the nominal depreciation of the currency was complemented with a significant rise in public development expenditure; tax, rental and utilities rebates to businesses; rebates to households on Housing and Development Board (HDB) charges and rentals; increased funding for skill training; and lower contribution rates to the Central Provident Fund (CPF)—the government administered compulsory saving scheme. More recently, during the global financial crisis, the government instituted a jobs credit scheme to preserve jobs and a Special Risk-Sharing Initiative (SRI) to ease domestic credit constraints for businesses.12

15. The government also supports a flexible wage policy, with annual and monthly variable components of the total wage, to enable companies to adjust to changing economic conditions. As shown in Figure 6, the various business cost-cutting measures during the Asian and global financial crises helped to achieve real adjustment in the exchange rate without necessitating a large or persistent depreciation of the NEER that could have had other ramifications for the macroeconomy.

Prudential Measures

16. To mitigate the financial-stability risks associated with capital flows, Singapore has relied extensively on macroprudential policies. MAS is the financial regulatory and supervisory authority in Singapore, which sets financial regulations and provides guidelines on sound risk management practices to domestic financial institutions. It conducts regular financial system soundness and stability assessments to potential risks arising from external and internal economic developments. The implementation of cyclical macroprudential policies in Singapore to mitigate the financial-stability risks arising from capital flows has thus been aided by a strong financial regulatory and supervisory architecture.

17. While the use of macroprudential policies has attracted much attention since the global financial crisis, Singapore applied macroprudential policies in as early as 1996. The motive behind the measures was to deter speculative activity in the property market, and to dampen the sharp rise in property prices on the back of a foreign inflow surge (Figure 8). Thus, macroprudential measures, including fiscal-based measures, were introduced (such as loan-to-value limits, a stamp duty and capital gains tax on the sale of property within three years of purchase) and restrictions on foreigners from taking on local currency loans to purchase property.13 Some of these measures were eased when residential property prices declined during the Asian financial crisis, while others were lifted a couple of years later in 2003. A further relaxation of measures—including a reduction in stamp duties, increase in the loan-to-value limit, and reduction in the minimum cash down-payment requirement—ensued between 2003 and mid-2005, as property prices stabilized.

Figure 8.
Figure 8.

Singapore: Macroprudential Measure and House Prices

Citation: IMF Staff Country Reports 2017, 241; 10.5089/9781484312858.002.A005

18. Measures were, however, tightened again in the runup to the global financial crisis as foreign inflows soared and speculative activities in the property market increased. The stamp duty concession was withdrawn in mid-2006, and the Deferred Payment Scheme (under which buyers could defer payments until the completion of properties) was disallowed in October 2007. At the peak of the global financial crisis, as private property prices fell, the government took supplyside measures and suspended land sales, while allowing developers more time for the completion and sale of their projects. Yet—on the back of low global interest rates, rising capital inflows, and supply shortages in the residential property market—as property prices rose sharply in the second half of 2009, the central bank acted proactively, and disallowed house loan schemes that could encourage speculation (such as interest only loans).14 Over 2010–13, several other measures were tightened or introduced to stabilize property prices (such as lower LTV limits, a cap on mortgage tenures, an increase in the Seller’s Stamp Duty, the imposition of the Additional Buyer’s Stamp Duty (ABSD), and the introduction of the Total Debt Servicing Ratio for all property loans). These measures have had an impact on property prices, transaction volumes, housing loan volumes, and the risk profile of housing loans (see Appendix VI of IMF, 2017; Seng and others, 2015), reining in the rise in house prices in Singapore as compared to its regional peers (Figure 9).

Figure 9.
Figure 9.

Singapore: Real House Prices in Regional Peers

(2008=100)

Citation: IMF Staff Country Reports 2017, 241; 10.5089/9781484312858.002.A005

Source: IMF RES MFD real house price database.

19. Macroprudential policies have also been used as a complement to monetary policy. Thus, along with deploying macroprudential policies to deal with property-related risks, the central bank also adopted some measures in recent years to support monetary policy in curtailing domestic inflationary pressures, and discouraging households from over borrowing. These include financing restrictions on motor vehicle loans such as LTV limits and a cap on the tenure of the loans.

20. It is worth noting that the cyclical variations in prudential measures have been taking place against the backdrop of strong financial supervision. MAS’ vigilant financial supervision ensures that domestic banks engage in sound credit practices, and have strong capital and liquidity positions, with no significant currency or maturity mismatches on their balance sheets.15 On the eve of the Asian crisis, for example, the capital adequacy ratio of Singaporean banks was among the highest in the region; and the level of non-performing loans did not threaten the stability of local banks as substantial provisions had been set aside. Similarly, Singaporean banks remained strong throughout the global financial crisis because of their strong capital and liquidity positions.

Capital Account Policies

21. Singapore dismantled exchange controls through the 1970s—removing all restrictions in 1978—and largely liberalized its capital account to promote the development of an offshore financial market. The setting of the exchange rate as a monetary policy benchmark in the early 1980s, however, was accompanied by the policy of non-internationalization of the Singapore dollar to prevent a speculative attack on the local currency. Under the non-internationalization policy, the international use of domestic currency was restricted to prevent the buildup of offshore deposits of domestic currency that could be used by speculators to short the Singapore dollar. Specifically, the restrictions included consultation with the central bank before extending credit facilities exceeding S$5 million to residents or nonresidents for use outside Singapore.16

22. Further steps toward capital account liberalization were undertaken over the 1990s. The consultation requirement was relaxed in 1992, and credit facilities in local currency of any amount were permitted to be extended, provided that the funds were to be used to support economic activities in Singapore (the latter excluded financial and portfolio investments; Kapur, 2007). Concurrently, banks were advised against granting local currency credit facilities to nonresidents for speculating in the local financial and property markets. From 1998 onward, a series of steps were undertaken to further relax the non-internationalization policy, and the current policy (known as “Lending of S$ to Non-Resident Financial Institutions”) has only two key requirements: first, financial institutions may not extend credit facilities exceeding S$5 million to non-resident financial entities where they have reason to believe that the proceeds may be used for speculation against the Singapore dollar; and second, that non-resident financial entities must convert Singapore dollar proceeds from loans (exceeding S$5 million), equity listings, and bond issuances to foreign currency before using these funds outside Singapore.17

23. Against this background of capital account liberalization, Singapore has not resorted to active use of capital controls to manage capital flow volatility. In fact, it is interesting to note that steps to relax the non-internationalization policy to strengthen Singapore’s position as a global financial center were undertaken during the Asian financial crisis in 1998. The MAS has, however, occasionally imposed targeted measures on foreigners to manage house price surges when (at least partly) fueled by liability inflows and purchase of residential property by foreigners such as, for instance, in the runup to the Asian financial crisis, and in the aftermath of the global financial crisis. Thus, as mentioned above, non-residents were prohibited from taking local currency housing loans in 1996, while the ABSD—which imposes a higher stamp duty on foreigners buying property—was imposed in end-2011 (and further tightened in early 2013).18 These measures were introduced in tandem with a broader package of prudential measures, and had the desired effect of reducing nonresident transactions in the property market and dampening the surge in house prices.

C. Conclusion and Policy Implications

24. Despite being extremely vulnerable to external developments, Singapore has remained resilient to external financial shocks due to the sound management of capital flows. The success of the government’s cyclical policy response owes much to Singapore’s strong fundamentals—including prudent fiscal management, a credible central bank, a robust financial system, a well-governed corporate sector, and flexible factor markets—that give government the latitude to respond nimbly and counter-cyclically to mitigate the impact of external shocks on the economy.

25. On the macroeconomic front, the central bank mainly relies on monetary policy to stabilize inflation and output. The basket-band-crawl feature of the exchange rate system allows flexibility to respond to the macroeconomic concerns associated with capital flows, while mitigating excessive exchange rate volatility. Fiscal policy is also responsive, especially to large shocks, while a flexible wage policy helps to adjust the real value of the currency without necessitating large movements in the local currency.

26. From the financial-stability perspective, the central bank has remained vigilant to asset price increases and potential mismatches on private sector balance sheets—responding swiftly when these risked creating negative spillovers to the broader economy. The macroprudential policy response has typically operated at both the intensive and extensive margins—involving changes to conventional prudential measures (loan-to-value ratios; mortgage tenure caps; debt servicing ratio), but also an expansion of the toolkit to include fiscal measures (stamp duties; capital gains tax) and supply-side policies. This involves coordination across different government agencies (such as the central bank, the Ministry of Finance, and the Ministry of National Development) that has been achieved efficiently to reach the desired outcome. Moreover, policies have been adopted in a concerted and calibrated manner, with gradual tightening until the risks abated, and subsequent relaxation as the cycle turned.

27. Singapore’s holistic and multi-pronged approach to managing capital flows offers important lessons for countries dealing with capital flow volatility. A key takeaway is to act during the boom phase to prevent macroeconomic and financial imbalances from festering—thereby avoiding a hard landing when the global financial cycle turns. This in turn requires good judgment of when to act, and the flexibility and institutional ability to deploy tools to target the various risks. Moreover, achieving credibility through a consistent macroeconomic policy framework, maintaining adequate buffers, and ensuring a sound banking system are critical to enhancing the resilience of the economy during financial downturns.

28. For Singapore, the challenges posed by capital flows may increase going forward as it strives to become a fintech hub, a regional gateway for renminbi, and the premier wealth management center. Among maintaining sound macroeconomic and financial sector policies, it would need to strengthen the surveillance of potential cross-border financial spillovers, and ensure that financial regulation adapts to innovation, and meets international standards of transparency.

References

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1

Prepared by Mahvash S. Qureshi (RES).

2

For ease of illustration, this note follows the BPM5 sign convention of recording financial flows. Thus, positive (negative) values indicate inflows (outflows) in all charts and estimations. Moreover, asset flows exclude official reserve asset flows.

3

The latter result is consistent with several recent studies, which find that spillovers from China’s equity market to other equity markets in the region have increased (see, e.g. Shu and others, 2016; MAS, 2016).

4

While this pattern of capital flows is similar to that observed in other advanced economies and global financial centers, it is in contrast to the experience of most emerging markets in the region, where net financial flows typically mirror liability flows. The impact of global factors on asset and liability flows also tends to be in the same direction in emerging markets, leading to more volatile net flows. (Thus, for example, a rise in real US interest rates or a decline in commodity prices typically reduces both liability and asset flows in emerging markets; see, e.g., Ghosh and others, 2014).

5

See Ostry and others, 2010; IMF, 2012; Ghosh and others, 2016; and Ghosh and Qureshi, 2016, for a detailed discussion and empirical evidence on the macroeconomic and financial vulnerabilities associated with large capital flows.

6

The regression results reported in Figure 5 are unconditional correlations, but they remain quantitatively and statistically very similar if domestic variables (such as real GDP growth and real GDP per capita) are included in the model.

7

The approach of the authorities to the management of capital flows thus accords well with that recommended in the recent academic and policy-oriented literature (Ostry and others, 2010; IMF, 2012; Blanchard and others, 2014).

8

Looking at asset flows, the correlation with NEER/REER is negative, suggesting that the MAS allows the currency to depreciate when asset flows rise. This, however, likely reflects the fact that asset flows to Singapore increase when global economic and financial conditions deteriorate (as shown in Table 1), and domestic economic activity is adversely impacted. The MAS then allows the NEER to depreciate to stabilize output and inflation.

9

Parrado (2004) and IMF (2013) estimate the MAS’ monetary policy reaction function using Taylor rule-type equations (with the interest rate replaced with the NEER as the policy instrument), and formally establish that it follows a countercyclical monetary policy stance.

10

Regressing domestic credit (in percent of GDP) on foreign exchange reserve accumulation (in percent of GDP), the coefficient is large and significantly negative, suggesting that much of the impact of intervention is sterilized.

11

The correlation between annual liability flows and fiscal balance (in percent of GDP) is positive, suggesting a countercyclical fiscal policy stance in the face of foreign inflows that, as shown in Figure 5, tend to be expansionary. This is in contrast to most other countries in the region where fiscal policy tends to be procyclical (Ghosh and others, 2017).

12

The Jobs Credit Scheme introduced in 2009 provided businesses with a cash grant based on the wages of citizen and permanent resident employees to deter them from laying off workers. The SRI comprised a Bridging Loan Programme and a trade finance module under which the government took 80 percent of the default risk on loans of up to S$5 million, and 75 percent of the risk on trade financing, respectively, to unfreeze credit across the entire supply chain.

13

These measures were accompanied by supply-side measures to increase the land supply (see Kim, 2011, and Seng, 2015, for a discussion of the property-related measures deployed during the 1990s). The measures were considered to have been effective in dampening the house price boom, thereby mitigating the impact of the Asian financial crisis when it unfolded.

14

The measures were taken despite households’ strong net asset position and low non-performing loan ratios on mortgages, against a concern that if global interest rates increased or domestic growth faltered, mortgage financing burdens would rise (while household balance sheets would deteriorate if house prices fell; Menon, 2013).

15

The 2016–17 Global Competitiveness Index ranks Singapore as number 1 and 8 in the regulation of securities and soundness of banks, respectively, in the world (with a score of 6.3 and 6.4 out of a best possible score of 7).

16

To avoid circumvention through financial derivatives, credit facilities were defined to cover a broad range of financial instruments, including loans, foreign exchange swaps, interest rate swaps, facilities incorporating options, and forward rate agreements in local currency (Kapur, 2007).

17

These requirements are not considered as impediments to financial market development, as the Singapore dollar is not a currency commonly used for transactions abroad. Instead they are considered as a basic safeguard against funding of speculative activities (Kapur, 2007; Chow, 2008).

18

In general, foreign investment in residential and other properties (including vacant land) that have been zoned or approved for industrial or commercial use requires government approval. This, however, does not apply to the purchase of residential units in buildings of six or more stories and in approved condominium developments.

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Cover IMF Staff Country Reports
Singapore: Selected Issues
Author: International Monetary Fund. Asia and Pacific Dept
Volume/Issue:
Volume 2017: Issue 241
Publisher:
International Monetary Fund
ISBN:
9781484312858
ISSN:
1934-7685
Pages:
67
DOI:
https://doi.org/10.5089/9781484312858.002
  • View in gallery

    Singapore: Stock of External Assets and Liabilities in Singapore and Other Selected Countries

  • View in gallery

    Singapore: Net Financial, Asset, and Liability Flows to Singapore

  • View in gallery

    Singapore: Volatility of Net Financial Flows to Singapore

  • View in gallery

    Singapore: Real GDP Growth in Singapore and Selected Countries, 1990–2016

  • View in gallery

    Singapore: Financial Flows, Inflation, and Financial Vulnerabilities

  • View in gallery

    Singapore: Liability Flows and Macroeconomic Policy Response, 1995–2016

  • View in gallery

    Singapore: NEER and Monetary Policy Stance

  • View in gallery

    Singapore: Macroprudential Measure and House Prices

  • View in gallery

    Singapore: Real House Prices in Regional Peers

    (2008=100)

Singapore: Stock of External Assets and Liabilities in Singapore and Other Selected Countries

Singapore: Net Financial, Asset, and Liability Flows to Singapore

Singapore: Volatility of Net Financial Flows to Singapore

Singapore: Real GDP Growth in Singapore and Selected Countries, 1990–2016

Singapore: Financial Flows, Inflation, and Financial Vulnerabilities

Singapore: Liability Flows and Macroeconomic Policy Response, 1995–2016

Singapore: NEER and Monetary Policy Stance

Singapore: Macroprudential Measure and House Prices

Singapore: Real House Prices in Regional Peers

(2008=100)