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Economic Fundamentals and Managed Floating Exchange Rate Regime in Singapore

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  • Reza Y. Siregar

    (Department of Economics, National University of Singapore)

  • Choo Lay Har

    (The Business School, National University of Singapore)

Abstract

¡°Pegging the Singapore dollar to a basket of currencies instead of a fixed rate to the US dollar and having a transparent system were claimed by the government of Singapore to have enabled the country to weather the Asian financial crisis better. This empirical paper reviews the claim by testing the consistency of observed Singapore dollar real exchange rate against the country¡¯s key real economic fundamentals. Employing the concept of Natural Real Equilibrium Exchange Rate (NATREX), our study finds that the real effective exchange rate has floated around the NATREX rate in 1990¡¯s. Hence, our test results support the official statement.

Suggested Citation

  • Reza Y. Siregar & Choo Lay Har, 2001. "Economic Fundamentals and Managed Floating Exchange Rate Regime in Singapore," Journal of Economic Development, Chung-Ang Unviersity, Department of Economics, vol. 26(1), pages 133-148, June.
    • Handle: RePEc:jed:journl:v:26:y:2001:i:1:p:133-148
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    References listed on IDEAS

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    Cited by:

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    2. Naseeem, N.A.M & Tan, Hui & Mohd, Siti, 2010. "Exchange Rate Regime, Exchange Rate Variability and Flows of Malaysia’s Foreign Trade," Jurnal Ekonomi Malaysia, Faculty of Economics and Business, Universiti Kebangsaan Malaysia, vol. 44, pages 35-49.
    3. Works, Richard Floyd, 2016. "Econometric modeling of exchange rate determinants by market classification: An empirical analysis of Japan and South Korea using the sticky-price monetary theory," MPRA Paper 76382, University Library of Munich, Germany.
    4. Frederik Kunze, 2020. "Predicting exchange rates in Asia: New insights on the accuracy of survey forecasts," Journal of Forecasting, John Wiley & Sons, Ltd., vol. 39(2), pages 313-333, March.
    5. You, Kefei & Sarantis, Nicholas, 2012. "A twelve-area model for the equilibrium Chinese Yuan/US dollar nominal exchange rate," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 22(1), pages 151-170.
    6. niaz ahmad mohd, Naseem & yusop, Zulkornain & masron, Tajul ariffin, 2009. "How did the Malaysian real exchange rate misalign during the 1997 Asian crisis?," MPRA Paper 44922, University Library of Munich, Germany.
    7. Kunze, Frederik, 2017. "Predicting exchange rates in Asia: New insights on the accuracy of survey forecasts," University of Göttingen Working Papers in Economics 326, University of Goettingen, Department of Economics.

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