By Andrea Tan

(Bloomberg) – Singapore’s central bank said both cyclical and structural factors can affect the pricing and confidence in US dollar assets, adding that its managing director didn’t say earlier this week that dollar assets are irreplaceable.

The Monetary Authority of Singapore’s Managing Director Chia Der Jiun cited the factors among three points he made at the Qatar Economic Forum on Tuesday, the central bank said in a statement that included an extended transcript of his comments.

“Markets are pricing in slower growth, the prospect of higher inflation and questions over the fiscal trajectory in the US, as well as rotation into other regions and hedging of overweight exposures,” the MAS said. “The outlook for the structural advantage of USD assets is relatively stable for now,” and whether this changes depends on the fiscal trajectory and policies in the US.

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Speaking in Qatar on May 20, Chia said that dollar-based assets are “the dominant, safe assets for use in the financial system, deeply embedded. The $28-trillion Treasury market is fundamental and systemic to the global financial system and there is no alternative for this point.”

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