Impact of Aging Population Monetary and Exchange Rate Management in Singapore

The Singapore Economic Review, Vol. 53, No. 2, pp. 245-259, 2008

Posted: 25 Apr 2010

See all articles by Paul S. L. Yip

Paul S. L. Yip

Nanyang Technological University (NTU) - Centre for Research in Financial Services (CREFS)

Date Written: August 1, 2008

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.

Keywords: Ageing population, Central Provident Fund, exchange rate system, monetary policy, Singapore

Suggested Citation

Yip, Paul S. L., Impact of Aging Population Monetary and Exchange Rate Management in Singapore (August 1, 2008). The Singapore Economic Review, Vol. 53, No. 2, pp. 245-259, 2008, Available at SSRN: https://ssrn.com/abstract=1503735

Paul S. L. Yip (Contact Author)

Nanyang Technological University (NTU) - Centre for Research in Financial Services (CREFS) ( email )

Nanyang Avenue
Singapore, 639798
Singapore
+65 790-4983 (Phone)
+65 791-3697 (Fax)

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