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MONDAY, APRIL 20, 2015
MAS ‘will
continue
twice-yearly
S$ review’
Tharman dismisses talk of a shift in
how the Govt manages the economy
By JEREMY AU YONG
US BUREAU CHIEF
IN WASHINGTON
SINGAPORE is sticking to the
twice-yearly review of its foreign
exchange policy, Deputy Prime Minister Tharman Shanmugaratnam
said, dismissing suggestions that
the unexpected shift by the Monetary Authority of Singapore (MAS)
in January marked a more fundamental change in how the Government manages the economy.
Investors and economists have
been caught off-guard twice this
year by MAS, which adjusted the
foreign exchange band in January,
when no one expected it to, and
then maintained the status quo
last week, when many anticipated
another change. Some analysts
even suggested that the Government would increase the frequency of its monetary policy statements – made every April and October – due to a more uncertain
macroeconomic outlook.
Speaking on the issue for the
first time since the announcements,
DPM Tharman, who is also Finance
Minister, said it did not make sense
for the foreign exchange policy to
be changed too often.
“We are already providing for
fluctuations within the band, and
to change the band often would be
most unwise. It will lead to too
much uncertainty, too much
front-running each time people
anticipate a change, and the uncertainty isn’t going to help the mar-
International Monetary Fund managing director Christine Lagarde and International Monetary and Financial Committee
(IMFC) chairman Agustin Carstens presenting a resolution of appreciation from the IMFC to DPM Tharman Shanmugaratnam,
whose four years at the helm of the IMFC have ended, in Washington on Saturday. PHOTO: INTERNATIONAL MONETARY FUND
kets or the economy,” he said, noting that having an exchange rate
band requires less frequent
tweaks than trying to maintain an
interest rate.
MAS uses an exchange rate policy as its monetary policy tool, unlike many other central banks,
which use interest rates. Mr Tharman stressed that the policy is fo-
cused on the medium term.
“Our time horizon when we
think through the implications of
exchange rate policy is basically
two to three years. It is not about
the next six months. It is a two- to
three-year perspective. And the
reason is that there are long lags
between the changes in exchange
rates and actual inflation and
Cycle paths for Punggol, Jurong Lake, East Coast
By DANSON CHEONG
PUNGGOL, Jurong Lake and East
Coast will be the next three housing estates to receive bicycle networks of their own under the 2013
Land Transport Masterplan.
These off-road cycling paths
will be built by 2017, the Land
Transport Authority (LTA) told
The Straits Times in response to
queries.
Cycling path networks will also
be completed in Yishun,
Changi-Simei and Taman Jurong
this year, the LTA said.
Earlier in February, the LTA
completed a 13.3km network of
paths in Pasir Ris – the third cycling town here so far after Tampines and Sembawang.
The LTA chose the towns
based on “strong community interest and support for cycling”, and
the availability of land.
Cycling paths will be built in
every housing estate by 2030, as
part of the Government’s plan to
encourage bicycle use for “first
and last mile” journeys. Part of its
efforts include rolling out bicycle-sharing trials for the Jurong
Lake District and Marina Bay city
centre by the year’s end.
Last month, the Government
announced that it would hold a
consultation exercise for rules on
motorised bicycles and other personal mobility devices, which
have grown in popularity.
In February, the LTA called a
tender for consultants to design
cycling networks for a further six
HDB towns – Ang Mo Kio, Choa
Chu Kang, Toa Payoh, Bukit Panjang, Woodlands and Bishan.
But how these networks will
eventually turn out will depend on
factors such as connections between residential areas and train
or bus stations, and existing site
conditions, said the LTA.
“Where we can, we will try to
separate cycling paths from foot-
paths to allow pedestrians and cyclists to have their own space,”
the authority said.
The Straits Times understands
that the design solutions being
studied by the LTA include a model designed by the Nanyang Technological University (NTU).
Called the “level-of-service acceptability matrix”, or Losam, the
NTU model makes recommendations on whether cycling paths
should be widened or segregated.
It matches pedestrian and cyclist traffic flow with a rating of
how “serviceable” the path would
be, said Associate Professor Wong
Yiik Diew, director of NTU’s Centre for Infrastructure Systems,
who co-developed the model.
“This model will allow the authority to judge, for instance, that
at areas near the train station with
high traffic, you would need segregated paths,” he said.
“Slightly further away, you
might need to only widen existing
footpaths. And if you go even further, perhaps you can just leave
the existing paths alone.”
Cyclists in towns with the upcoming networks are looking forward to the new paths. Contractor Muhammad Ghouse, 60,
thinks they will make his commute
to Bedok MRT station safer.
“Sometimes, there are many pedestrians on the pavements... If there
are bike paths, it would be good
for old-timers like me,” he said.
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growth. So, it is not a good idea to
revise our policy often because it
takes a long time to have an effect
to begin with,” he said.
“The policy is working quite
well... Only twice have we had to
announce a change in the band
outside our six-monthly cycle.”
These were in October 2001,
when the dot.com bubble burst,
and in January this year because
of plunging oil prices.
In a wide-ranging interview with
Singapore media, Mr Tharman,
who was in Washington for the International Monetary Fund-World
Bank meetings, also gave a broad
outlook for the global economy.
He said the predominant concern among leaders at the summit
was not so much the short-term
shocks that would come when the
US Federal Reserve raises interest
rates, but the build-up of financial risks caused by having had
low interest rates for so long.
“The key issue concerns the
risks of not normalising – the consequences of keeping interest
rates where they are and sticking
with a very easy monetary policy
over a long period, in the US, in
Europe and Japan.”
Mr Tharman said the unprecedented period of low interest rates
had come at a cost – higher risk
because of investors putting money into less-safe assets in search
of yield, pension and insurance
funds put at risk of insolvency in
the long term, and the fact that interest rates could no longer be
used to deal with business cycles.
He added that politicians had
put off more politically difficult
structural and fiscal reforms and
simply relied on monetary policy.
“It is critical at this stage of the
recovery, if we want to sustain
the recovery without building up
risks in the financial system, we
have to shift the balance of responsibilities away from a very strong
focus on monetary policy by central banks towards fiscal reforms
and, critically, structural reforms,” he said.
[email protected]
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Older attractions face dwindling visitors
FALLING number of tourists
and competition from newer
attractions have affected
older and smaller
establishments. The
Association of Singapore
Attractions (ASA) said half
of its 70 members have seen
an average dip of 20
per cent in visitor
numbers over the
past year. ASA
chief Kevin
Cheong said
most members
are starting to
realise they need
to innovate.
쐽 HOME B6
All eyes on Australia’s Web anti-piracy fight
AUSTRALIA, which has the
world’s highest rates of
illegal downloads, has
launched a crackdown on
Internet piracy. The
measures are likely to be
watched closely by
international online pirates
and will involve action to
block access in Australia to
websites around the world.
But analysts say the
crime will still be hard to
stop. 쐽 WORLD A16