Ultra-rich not driving up costs in Singapore—MAS head Ravi Menon

SINGAPORE: Mr Ravi Menon, the Managing Director of the Monetary Authority of Singapore (MAS), said on Wednesday (Jul 5) that Singapore’s battle against inflation is not yet over, even if headline inflation has gone down from 5.4 per cent in the first quarter to 4.7 per cent in May.

The forecast for headline inflation for 2023 has been adjusted from 5.5 to 6.5 per cent and is now at  4.5 to 5.5 per cent.

Singapore’s central bank released MAS’ Annual Report and Sustainability Report for 2022 and 2023 on July 5.

Mr Menon assured the public that the ultra-wealthy are not causing rising costs.

“Wealth inflows into Singapore have little effect on the exchange rate, domestic inflation, property prices or car price.

The reason for this is simple: While the wealth is managed here, most of it is invested outside Singapore… Singapore is just an intermediary for these flows,” TODAY quotes him as saying.

Additionally, because of the country’s tight monetary stand, he expects inflation to ease by the end of the year, although MAS is yet to “switch from inflation-fighting mode to growth-supporting mode.”

However, Mr Menon added that due to increased travel-related costs, core inflation is expected to be 2.5 to 3 per cent by the end of 2023. It was previously forecast at 2.5 per cent.

“We are closely monitoring the evolving growth-inflation dynamics and remain vigilant to risks on either side,” he said, with MAS prepared to adjust monetary policy, mainly if inflation accelerates again.

MAS saw a net loss of S$30.8 billion for the 2022 – 2023 fiscal year, which Mr Menon said is related to its monetary policy tightening.

Reuters quoted Mr Chua Hak Bin, an economist with Maybank, as saying that the government should not lose focus on fighting inflation.

“The government has plenty of fiscal options to support growth… and levers to cushion the downturn and may come up with a fiscal support package if a recession materialises.” /TISG

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