We thank Mr Jarrett Choo Hong Li for his letter on 28 October 2022 suggesting that the MAS re-examine the merits of issuing inflation-linked bonds during this period of elevated inflation globally. 

2   Inflation-linked bonds are bonds where the principal and interest pay-outs rise or fall based on a specified measure of inflation such as the Consumer Price Index. Given these characteristics, inflation-linked bonds tend to be more attractive to investors than conventional bonds during periods when inflation is rising. However, inflation-linked bonds can experience periods of negative real returns and even underperform conventional, nominal bonds when inflation turns out to be lower than expected.

3   With nominal yields having risen significantly over the past few months, there has been healthy uptake of conventional SGS products by both institutional and retail investors. Looking ahead, in deciding whether to introduce new types of Singapore Government Securities (SGS), MAS and the Government will carefully consider the needs and characteristics of all investors. These include whether there is sufficient stable demand to sustain an issuance programme over the medium term, whether secondary market liquidity will be sufficient to facilitate ease of entry and exit for investors, and whether the product is easily understood by the public and suitable for their savings goals compared to existing products. 

4   MAS will closely consult with market participants to study the benefits and costs of issuing inflation-linked bonds as it considers ways to further develop the SGS market. 


Dawn Chew
Director (Corporate Communications)
Monetary Authority of Singapore