Finance Minister Tharman tipped to chair IMF committee

Singapore Finance Minister Tharman Shanmugaratnam is the favourite over South African Pravin Gordhan to head the International Monetary Fund's (IMF's) International Monetary and Financial Committee (IMFC), IMF board sources told Reuters.

The finance ministers of Singapore andSouth Africa have emerged as the only contenders to chair the IMF's main advisory committee, the sources said on Tuesday.

They added that an announcement was expected as soon as tomorrow if the fund's managing director, Mr Dominique Strauss-Kahn, can narrow the selection to one. Failing that, the outcome will be determined in a secret vote by the IMF board members.

It would be a first time for either an African or Asian country to hold the post.

Several sources said Mr Strauss-Kahn favoured Singapore because of the IMF's recent push to get Asia on its side as the fastest growing part of the world economy.

Mr Strauss-Kahn has also tried in recent months to put the Asian financial crisis finally behind the IMF, whose invasive policy prescriptions have long been blamed in the region for exacerbating the 1997/1998 meltdown.

The IMFC seat was left vacant last month by Mr Youssef Boutros-Ghali, who was replaced as Egypt's finance minister in a Cabinet shake-up amid protests to topple long-time leader Hosni Mubarak.

Mr Domenico Lombardi, a former executive board member at the IMF, said that by choosing Singapore, the IMF would bring Asia further into its fold at a critical time in the global economy, when world finance leaders are focused on overhauling the international monetary system and tackling trade and financial imbalances.

The IMF has just completed a series of reforms to give emerging market economies in Asia and elsewhere a greater say in the institution by boosting their voting power.

Mr Lombardi said Singapore was regarded as a key bridge between East and West, an important factor when it came to addressing tensions between the United States and China over such things as trade imbalances.

'Singapore is uniquely placed to facilitate a dialogue between the US and China,' he added.

On the other hand, if South Africa led the IMFC, it would be a 'great achievement for sub-Saharan Africa', Mr Lombardi said. 'This would go a long way in the long journey initiated by (former IMF chief) Michel Camdessus that sought to make low-income countries regular, fully fledged members of this institution.'

The IMF's advisory committee officially meets twice a year - during the IMF meetings in the spring and autumn - to discuss the direction of the institution. It comprises finance ministers and central bank governors from 24 countries.

The new chairman will take over at a time of heightened uncertainty in the world economy, with protests sweeping the Middle East and North Africa, and Japan's devastating earthquake and tsunami.

Swap deal can help Singapore become yuan centre

THE Sino-Singapore currency swap agreement can help establish the Republic as a renminbi centre for the region, said Monetary Authority of Singapore (MAS) deputy chairman Lim Hng Kiang yesterday.

'Currently, the Chinese are keen to internationalise the renminbi (yuan), and the main vehicle for doing so is through Hong Kong. By having this swap line, we are encouraging them to also provide the facility through Singapore.

'We can expect the Chinese to do so bilaterally with other South-east Asian countries, but to the extent that Singapore is the financial hub for South-east Asia, and the trade and investment facilitator for many of the deals and many of the operations arising in South-east Asia, then of course Singapore can aspire to be a renminbi centre for South-east Asia.'

Mr Lim, who is also Trade and Industry Minister, was responding to a question in Parliament from Nominated MP Teo Siong Seng.

MAS inked the $30 billion currency swap agreement with the People's Bank of China (PBOC) on July 24.

The agreement will allow MAS to borrow up to 150 billion yuan of the Chinese currency from the PBOC, in exchange for the equivalent in Singapore dollars.

The swap line is intended to promote bilateral trade and direct investment between the two countries. It will also facilitate the internationalisation of the yuan.

Singapore banking system among Top 4 in world

SINGAPORE'S banking system has emerged from the global financial crisis as one of the Top 4 in the world along with Canada, Australia and Hong Kong, according to ratings agency Moody's.

Moody's Investors Service rated the banking sector in these four jurisdictions as having a 'stable' outlook with an averaged bank rating of B, one notch below the highest rating A.

Singapore banks have been more resilient than many global banks throughout the crisis, with limited damage to their asset quality, adequate earnings, and very liquid and well-capitalised balance sheets.

Singapore ranked 4th in financial centres survey

Singapore is closing the gap on London and New York as a leading financial centre, according to a new ranking. Third in place is Hong Kong.

The six-monthly index is compiled by the Z/Yen Group think-tank and published by the City of London. It combines a survey of financial professionals with factors such as tax rates, airport satisfaction, office occupancy costs and stock exchange capitalisation.

Among the top cities, Singapore was perceived to be riding out the financial crisis with more resilience than the others.