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Parliament: DPM Tharman on why assets as investment buffer not a reserves drawdown

Published on Aug 4, 2014 5:15 PM
 
Deputy Prime Minister Tharman Shanmugaratnam said in Parliament on Monday, Aug 4, 2014, that the Government's net assets, which it relies on to back the interest rates paid on CPF savings, are Singapore's reserves. -- PHOTO: ST FILE

SINGAPORE - The Government's net assets, that it relies on to back the interest rates paid on CPF savings, are Singapore's reserves, said Deputy Prime Minister Tharman Shanmugaratnam on Monday.

And the bulk of it is made up of past reserves, accumulated during previous terms of government.

But this does not mean that the Government has drawn down on past reserves as defined by the Constitution when it relies on its buffer of net assets to meet the obligations on its liabilities, including its commitments on Special Singapore Government Securities (SSGS), in years when investment returns had been weak.

CPF savings are invested by the CPF Board in SSGS, and that is the link between SSGS and CPF interest rates.

 
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