Over the last 2 decades, the value of the Singapore dollar showed remarkable stability because of the country's steady economic growth. During this period of unprecedented growth, Singapore managed to avoid high inflation or economic recession. The Asian financial crisis
|Exchange rates: Singapore|
|Singapore dollars (S$) per US$1|
|SOURCE: CIA World Factbook 2001 [ONLINE].|
of 1997 did affect Singapore's economy, but the country was able to avoid the political and economic calamities that brought high inflation and sizable recession to neighboring Indonesia and Thailand. There was slowdown of the Singapore economy in 1997 and 1998, affecting all sectors and bringing a small rise in inflation. In 1999 and 2000, the country overcame the difficulties and produced significant growth. Inflation stabilized at about 0.4 percent and GDP growth at about 5.5 percent in 1999.
According to the IMF classification, the Singapore dollar is a freely floating currency determined by the foreign exchange market. The Monetary Authority of Singapore (MAS), which acts as the central bank, closely monitors the exchange rate and ensures the stability of the currency against international currency speculators. Due to the regional economic downturn, the value of the Singapore dollar declined slightly against the U.S. dollar, from 1.4174 in 1995 to 1.6733 in January 2000. This stability was supported by Singapore's huge stocks of foreign reserves, the world's largest in per capita terms (US$23,864 per head against US$14,070 per head in Hong Kong). These foreign reserves are even larger than those of the United States. Singapore is also the world's fourth-largest global exchange center after London, New York, and Tokyo, with Chase Manhattan Bank, Citibank, Deutsche Bank, Morgan Guaranty, and others, operating in this market.
Singapore has a single stock market, which until 1997 was known as the Strait Times Industrial Index (STII). In August 1997, it was replaced by the Straits Times Index (STI). In 1997 and 1998 the STI was affected by the regional recession, recovering in 1999 and 2000. According to the Singapore Exchange (SGX) statistics, 388 companies, representing total capitalization of S$389.5 billion (US$236 billion), were listed in the SGX main board in December 2000.