The legislation also provides for a mandated co-sharing of rental obligations between the government, landlords, and tenants. MAS’ RESPONSE TO THE COVID-19 ECONOMIC CRISIS MAS has responded to the COVID-19 economic crisis in six broad areas: Ensuring monetary stability; Ensuring financial stability; Providing credit and insurance reliefs for individuals and SMEs; Providing regulatory reliefs for financial institutions; Ensuring operational resilience of financial institutions; and Positioning the financial sector to emerge stronger. MONETARY STABILITY  MAS has focused on ensuring monetary stability through accommodative monetary policy and judicious money market operations. MAS eased monetary policy in April this year by setting the policy band for the nominal effective exchange rate on a 0% appreciation path, starting from the prevailing lower level of the exchange rate. The lower starting level of the exchange rate is consistent with the downward shift in inflation and economic activity. Keeping the exchange rate on a stable path going forward helps to underpin confidence amid the COVID-19 crisis. The aim of monetary policy during this crisis is to prevent a broadening of disinflationary pressures that would be destabilising for the economy. MAS does not seek to enhance export competitiveness through a weaker exchange rate. Such a policy will be especially futile in the current circumstances, where the sharp decline in global demand and supply-side frictions will offset any relative price advantages from a weaker exchange rate. Through its money market operations, MAS has ensured the smooth functioning of the short-term funding markets in Singapore.

The fiscal stimulus is considerable and there are signs of an upturn in employment and consumption. But new and larger outbreaks of infection in several states pose significant downside risks. Closer to home, the ASEAN-5 economies [2] are expected to contract by 2.6%. They will benefit from the emerging recovery in manufacturing; while the collapse in tourism will weigh more on some economies. The recovery will also be uneven across industries, ranging from L-shaped to U-shaped to V-shaped. Activities with greater “in-person” interactions – such as hospitality, hotels and restaurants, and tourism – may have to reopen later, observe strict safe-distancing measures, and operate at much lower capacities. Capital-intensive manufacturing and trade-related services could recover faster as demand returns but they might still face frictions in their supply chains. Modern services, such as ICT and financial services, will probably do best given their ability to serve customers and carry out transactions through digital means. While a strong short-term growth bounce is plausible, the longer term recovery is likely to be weak and gradual. People may be slower to return to previous patterns of work as long as the virus is still circulating. Higher unemployment and greater job insecurity will weigh on household spending, particularly once income support measures start to taper off. Businesses are likely to hold back investments in view of heightened uncertainty and this will in turn dampen the strength of the recovery. There may be lasting shifts in demand patterns and the associated disruptions in business activities.