Dear Editor,

"Structural cracks" (May 24th) contains references to Singapore that are factually incorrect.  First, the Singapore dollar is managed against a trade-weighted basket of currencies of our major trading partners, and is neither managed nor pegged (as is the case in the Hong Kong SAR) to the US dollar.  The trade-weighted Singapore dollar is allowed to fluctuate within a policy band that is consistent with economic fundamentals, with the aim of achieving sustained non-inflationary growth over the medium term.  This has been our monetary policy framework since 1981.  Second, in choosing the exchange rate as the intermediate target of monetary policy - in the context of completely free capital mobility in and out of Singapore - domestic interest rates are determined by market forces and not a result of discretionary policy actions.

Angelina Fernandez
Director (Communications)
Monetary Authority of Singapore