Prof Mayes, co-director of New Zealand Governance Centre, University of Auckland was of the opinion that the current method of using exchange rate to target inflation is appropriate. Using exchange rate as a monetary tool to control inflation is a hotly debated issue, some proposed using macro prudential policies as a more effective tool to curb inflation. He was speaking at an annual conference organised by SMU SKBI. The title of the conference was Asset Price Bubbles and Ong Chong Tee, Deputy Managing Director of MAS was the Guest of Honour.
SMU's Sim Kee Boon Institute for Financial Economics hosted its annual conference yesterday, with the theme of “asset price bubbles”. Monetary Authority of Singapore deputy managing director Ong Chong Tee said, “Our studies continue to show that in our small, open economy, the exchange rate has a significantly greater impact on growth and inflation compared with domestic interest rates.'
Singapore's central bank said that it is "firmly committed" to price stability over the medium term. The remarks were by made by MAS Deputy Managing Director Ong Chong Tee at the SMU Sim Kee Boon Institute for Financial Economics annual conference on Monday. "With respect to cost pressures arising from supply-side inflation, monetary policy should aim to tamper, but not fully offset this. Higher labour costs in the short term due to permanent supply side shifts are part and parcel of the market's equilibrating process to guide the economy to a more sustainable growth path," Mr Ong said.
The seeds of the next financial crisis could be sown even before the current one is completely over and that is the warning from some experts at the SMU Sim Kee Boon Institute for Financial Economics annual conference on asset price bubbles in Singapore. However, they noted that a crisis could be averted, if central banks did a better job of communicating their policy stance to the market.
Channel NewsAsia
At a conference organised by the Sim Kee Boon Institute for Financial Economics yesterday, Ravi Menon, the new MAS managing director said government regulation is needed to maintain stability in the global financial system, but that regulation shouldn't stifle markets.
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