Singapore, 10 Apr 2001.. The downward revision in GDP growth forecast for 2001 from 5-7% to 3.5-5.5% reflects the deteriorating outlook for the external environment. The downturns in the US economy and in the global electronics industry have been deeper than expected. Our less optimistic assessment of Singapore's prospects therefore reflects a cyclical fall in external demand, rather than deterioration in our export competitiveness.

2   The recent weakness of the Singapore dollar, especially against the US dollar, has prompted speculation that MAS has shifted its policy stance on the exchange rate. This is not so.

3   MAS manages the Singapore dollar exchange rate against a trade-weighted basket of currencies, and not against any single currency. MAS has not changed its policy of allowing a gradual, modest appreciation of the trade-weighted Singapore dollar within a policy band, as stated in the MAS Monetary Policy Statement of Feb 2001. Although the trade-weighted S$ has weakened since then, it has remained within the policy band. MAS stands ready to intervene if necessary to keep it within the band.

4   MAS will review its policy stance in July, and will be making a statement on monetary policy then.

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