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Impacts Of Ageing Population On Monetary And Exchange Rate Management In Singapore

Author

Listed:
  • PAUL S. L. YIP

    (Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore)

  • K. C. TAN

    (Division of Economics, School of Humanities and Social Sciences, Nanyang Technological University, Nanyang Avenue, Singapore 639798, Singapore)

Abstract

This policy note finds that the ageing of the population in Singapore will cause a reversal of the current net Central Provident Fund (CPF) contribution into a substantial net CPF withdrawal from 2025, with a peak occurring at 2035. The result is qualitatively robust to changes in the underlying assumptions of the projection. The paper then highlights the implications of this change on the exchange rate and monetary management in Singapore. Finally, the paper proposes policy measures that can help (a) mop up the excess liquidity due to the net CPF withdrawals; and (b) maintain the Monetary Authority of Singapore (MAS)'s influence on Singapore's exchange rate at a reasonable level in the longer future.

Suggested Citation

  • Paul S. L. Yip & K. C. Tan, 2008. "Impacts Of Ageing Population On Monetary And Exchange Rate Management In Singapore," The Singapore Economic Review (SER), World Scientific Publishing Co. Pte. Ltd., vol. 53(02), pages 245-259.
    • Handle: RePEc:wsi:serxxx:v:53:y:2008:i:02:n:s0217590808002926
    DOI: 10.1142/S0217590808002926
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    References listed on IDEAS

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    1. Ross Guest & John Bryant & Grant Scobie, 2003. "Population Ageing In New Zealand: Implications for Living Standards and the Optimal Rate of Saving," Treasury Working Paper Series 03/10, New Zealand Treasury.
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