by Aaron Low
THE International Monetary Fund (IMF) has praised Singapore for
implementing policies to limit the impact of the huge levels of
investment funds flowing into Asia.
Although property prices have risen here, these capital inflows
have not posed 'significant concerns' to Singapore, an IMF
statement said on Monday.
'The authorities have rightly introduced 'macro-prudential' and
other measures to forestall excessive exuberance and meet the
growing demand for housing,' said the IMF in its release of the
economic outlook report for the region.
Across Asia, policymakers have been troubled by the large
inflows of capital from the advanced economies, created by loose
monetary conditions, with interest rates often close to zero. This
has been driving up currencies, stock markets and property prices
to multi-year highs across Asia, stoking fears that another asset
bubble is forming.
To combat rising asset prices and inflation, the Singapore
Government embarked on a series of measures to curb speculation in
the property market in August and also allowed the Singdollar to
appreciate further. In recent months, it has also boosted the
supply of HDB flats and land for private housing development.
Economists had mixed reactions to IMF's assessment. Economists
such as DBS Bank's Irvin Seah agreed with the IMF and said while
there are signs of concerns, these are not alarming: 'As the
Government pointed out, most of the speculation in the market is
caused by locals and not foreign capital.'
