Within this overall tightening stance, MAS has allowed a temporary increase in core inflation to accommodate some of the changes in relative prices. This is to signal resource scarcity and stimulate behavioural shifts. Policy should not be so tight as to hinder the ability of firms to restructure. The tight monetary policy stance since April 2010 has been effective in containing inflationary pressures and keeping the economy on an even keel. It has had three important effects. First, the tighter monetary policy stance has successfully restrained imported inflation despite significant price pressures in the external environment during this period. •  In foreign currency terms, wholesale price inflation among Singapore’s major trading partners averaged around 5% per annum from 2010 to 2012. •  In comparison, overall imported inflation in Singapore dollar terms has been fairly benign, averaging slightly less than 2% per annum in this period. Specific examples illustrate well the efficacy of the exchange rate in dampening imported inflation. •  Global oil prices have risen by an average of 16% per year in 2010–2012. However, local petrol pump prices have only increased by 8%. •  Global food prices, as measured by the IMF Food and Beverage Price Index, rose by 9% per annum during this period, but domestic food prices increased by just 2%. Second, the stronger Singapore Dollar has dampened inflation indirectly by moderating the demand for our exports. In turn, this has eased the demand pressure on domestic resources such as labour and industrial space.

It may be worthwhile, as we discuss on current matters during the course of this training, to bear in mind and have foresight on the potential challenges that may surface from cross-border sharing of information, including the differences in legislative frameworks across different countries, confidentiality of information and network integration. Therefore, I note with interest that this workshop will also discuss the legal framework surrounding the credit reporting industry. In Malaysia, the Credit Reporting Agencies Act was gazetted in 2010, and is in the midst of being operationalised. The Act allows for the sharing of credit information in a regulated environment, primarily seeking to strike a balance between providing lenders with information for risk management purposes, and protecting borrowers’ rights to privacy. A Registrar has been set-up to oversee the implementation of the Act. The Office of the Registrar has regular engagements with credit reporting agencies to effectively implement the Act and ensure minimal disruption to the entire operations of the industry. While the benefits of a sound credit registry infrastructure are evident, it is critical to educate consumers on how to use their credit reports and to manage their level of debt. Financial education is, therefore, an important pillar which complements the work being done in enhancing credit information reporting. Proficiency in financial knowledge will contribute towards greater empowerment and competent financial decisions on the part of consumers, and also result in improved financial services by financial institutions. In Malaysia, financial education for adults is implemented through financial capability programmes, such as the POWER!