Following the news that the Trump Administration has placed Singapore on a currency manipulation 'watchlist', the Monetary Authority of Singapore (MAS) released a statement that makes its stance clear.

Here is MAS's statement on May 29:

"In response to media queries on the U.S. Treasury Report on Macroeconomic and Foreign Exchange Policies (UST Report) released today, the Monetary Authority of Singapore (MAS) said that it does not manipulate its currency for export advantage."

Maintain price stability, not export advantage

MAS stated that Singapore's policy framework is aimed at maintaining medium-term price stability through the exchange rate.

MAS pointed out that it managed the Singapore dollar's nominal effective exchange rate was within a policy band, like how other central banks conduct their monetary policy by targeting interest rates, as noted by the report.

Added MAS:

"Whether they target the exchange rate or the interest rate, central banks aim to keep consumer price inflation low and stable as their primary mandate."

Put current account surplus into context

The U.S. report also noted that Singapore had persistently maintained both a large current account surplus and a bilateral goods trade deficit with America, which totalled US$6 billion (S$8.3 billion) in 2018.

But MAS said that Singapore's current account surplus needed to be viewed in historical context.

It gave a brief history lesson, pointing out that during its early years, Singapore ran current account deficits when investment needs were greater than available savings.

Once the Singapore economy matured, its investment needs tapered off, so national savings naturally rose.

MAS said it expected Singapore's current account surplus to be reduced once savings were withdrawn to meet the needs of an ageing population.

However, none of this has to do with currency manipulation.

You can read MAS's full statement on its website.

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Top image from Donald Trump's Facebook page.