Don't turn reserves into a sacred cow

While I totally agree with Mr Tan Yip Meng that the reserves should be prudently managed, I found his stance that the reserves are sacrosanct and should be protected at all costs too extreme (Singapore's reserves must be protected at all costs; Dec 18).

We just do not have enough information on the reserves and future expenditure to come to such a definitive conclusion.

Many leading economists have warned of over-saving too.

There are also good arguments that our underprivileged and needy - and they are not small in numbers - may need more help.

The Government could share more information on our reserves or undertake having more open discussions on our reserves so that more constructive analysis and dialogue can take place. Otherwise, we are all second-guessing.

Mr Tan's view on the importance of a strong Singapore dollar is also too one-sided.

All things considered, a strong Singapore dollar may be the best current policy, but there is also a downside to an overly strong currency: Our exports may not be competitive.

It is all about striking the right balance. Finding the sweet spot is the key to managing the reserves and currency. We should keep an open mind and not make any single policy too sacrosanct that it becomes a yoke.

Tan Chin Kong

A version of this article appeared in the print edition of The Straits Times on December 20, 2017, with the headline 'Don't turn reserves into a sacred cow'. Print Edition | Subscribe