Singapore Central Bank Says Local Markets Functioning ‘Normally’

(Bloomberg) --

The Monetary Authority of Singapore sought to reassure the public Friday that markets are “functioning normally” as the coronavirus crisis sparks huge sell-offs around the globe.

“The Singapore Dollar money market and foreign exchange market are functioning normally in the face of heightened volatility in global and domestic financial markets,” the central bank said in a statement Friday. The MAS “stands ready to ensure the orderly functioning of financial markets and the stability of the financial system in Singapore.”

The comments came on a day of wild swings in Asian markets, prompting several central banks in the region to inject liquidity into the financial system to calm the panic.

The MAS, which uses the exchange rate as its main policy tool instead of interest rates, said Feb. 5 there was room within its exchange-rate band to accommodate some weakness in the local currency to counter the coronavirus outbreak. The bank’s next scheduled policy decision is in April.

The MAS has left more liquidity in the banking system via money market operations, and Singapore dollar interest rates have eased in tandem with global interest rates, the central bank said. The Singapore dollar’s nominal effective exchange rate has eased in an “orderly manner” within the bank’s policy band, in line with weakening economic conditions, the authority said.

To contact the reporter on this story: Michelle Jamrisko in Singapore at mjamrisko@bloomberg.net

To contact the editors responsible for this story: Nasreen Seria at nseria@bloomberg.net, Michael S. Arnold

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