Singapore rating to remain stable: Moody's<\/p>\n
SINGAPORE (Reuters): Singapore's Aa1 sovereign rating is
\nlikely to stay in place for the medium term despite ongoing
\nproblems in neighboring Indonesia, a senior analyst with Moody's
\nInvestors Service said on Friday.<\/p>\n
\"I think that if the crisis were to go on or to worsen in both
\nIndonesia and Malaysia, one would have to give that some
\nthought,\" Moody's sovereign analyst for Singapore, Malaysia,
\nIndonesia and Hong Kong, Steven Hess, told Reuters.<\/p>\n
\"Singapore's rating at Aa1 already did incorporate the
\nneighborhood where it is located to some extent.\"<\/p>\n
Hess said Singapore's large balance of payments surplus, large
\nfiscal surplus, strong international assets position and lack of
\nforeign debt would have given the city state an Aaa rating.<\/p>\n
\"We did not assign a triple A rating to Singapore precisely
\nbecause we did feel that it was dependent on Malaysia and
\nIndonesia.\"<\/p>\n
Hess said the Aa1 rating was expected to stay stable over a
\nlong period of time and was very secure.<\/p>\n
\"At that very high level, what the rating indicates to
\ninvestors is that the country is able to withstand shocks.<\/p>\n
\"We expect that if there should be a shock, Singapore would be
\nable to withstand it in the financial sense. Of course there are
\nundesirable consequences domestically for unemployment but in the
\nfinancial sense, we believe that Singapore has a strong
\nposition.\"<\/p>\n
Hess said the government's official 1999 gross domestic
\nproduct (GDP) growth forecast of minus one to plus one percent
\nwas not \"out of the realms of reality\".<\/p>\n
\"We probably would tend to think it is as more on the minus
\nside then the plus side but I don't think it's very far away from
\nthe range that the government has announced.\"<\/p>\n
Hess said Singapore's financial system reforms, aimed at
\nsecuring a position as a regional and global financial center for
\nthe city-state, were positive, but he sounded a note of caution
\nabout lifting restrictions on the trading of the Singapore
\ndollar.<\/p>\n
\"You have to proceed with caution in the current environment.
\nUltimately in the long run, to be a true financial center and to
\nincrease your market share as a global financial center, having
\nfewer restrictions on currency is certainly one competitive
\nedge.\"<\/p>\n
\"In the current environment of great volatility in global
\ncapital flows, I certainly wouldn't be one to say it is desirable
\nto lift all controls immediately.\"<\/p>",
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